26th August 2010 Pension Foreign Exchange Report QROPS & QNUPS

We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.  

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory.  In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.

Pushing off from a one month low on Tuesday, Sterling moved into a marginally more positive trading zone having been bolstered by a bout of short covering within the market. Data out from the US showed new single-family home sales fell sharply in July. This figure showed the slowest movement on record but with the pound and

US dollar moving in tandem, safe haven status remained associated with the Greenback. Shifting away from Tuesday’s low of $1.5373 the pound had progressed to 1.5455 by mid afternoon, but never really achieved the 1.56 levels that it enjoyed earlier in the week.

Sterling came off a little after the U.S. data, but the reaction to that was fairly muted and there are still no real trends or clarity in the market. 

There was no data or news to steer the pound and so by and large it was left to the other major currencies to influence its direction. The Euro was given a short-lived boost when the German sentiment survey came in above forecast (business morale at a three year high). This positive was soon negated with the concerns about the wider economic outlook of the main European countries.

The recent trend of moving into more traditional safe haven currencies (USD & CHF) has not done sterling any favours. The general economic climate in the UK has obviously influenced the Bank of England into making dovish monetary decisions and this does nothing to drum up support for a wavering pound.

The JPY was weakened across the board, on the rumour from central bankers that stimulus measures will continue to be followed so as to bolster the global recovery.

There was further negative movement when some Japanese companies came out in criticism of the strength of their currency, thus hindering exports and the economic strength of the country in general.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates.   This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.