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.
Sterling reversed early losses to jump more than a
cent against the dollar and half a cent versus the euro yesterday after
unexpected strong UK retail sales data, which has now raised hopes and fuelled
sentiment that the British economy can maintain its momentum in the third quarter.
"The retail sales data were way stronger than
expected and genuinely good numbers. There weren't any 'funny' factors which
boosted the reading," said a currency strategist.
The Office for National Statistics said retail sales
had risen by 1.1% on the month, the strongest growth since February and had by
far exceeded analyst forecasts of a 0.4% rise.
On the year, retail sales rose 1.3% in volume terms,
again above forecasts of a 0.6% rise.
These better than expected figures were also supported
by a rise in factory orders to a two year high which now bodes well for the recovery
after exceptionally strong second-quarter growth and alleviated concerns that
the economy would eventually lose steam.
Despite this uplifting data, the majority of
economists still believe the UK economy will continue to deteriorate in 2011,
and the Bank of England reported a further decline in business and mortgage
lending as well as the weakest annual broad money growth in 27 years.
Other data released yesterday in the UK by the Bank of
England, showed money supply grew at the slowest pace since at least 1983 and
bank lending contracted for a ninth month, suggesting a credit squeeze may be
becoming more entrenched.
M4, the broadest measure of money supply, expanded
2.3% in July from a year earlier. That’s the lowest rate since monthly date
started. The number of mortgage loans granted by a six bank lending panel fell
to 47,000 from 48,000 in June, a 14-month low. Loans to small and medium sized
businesses contracted 2% on the year.
Figures from the National Statistics showed Public
Sector Net Borrowing also fell in July as corporation tax receipts bounced back
sharply from last year.
Public Sector Net Borrowing came in at £3.1bn in July,
down from £5.5bn in the same month and below the expected figure of £4 billion.
The data suggest public sector deficits have peaked and are slowly moving in a
downward trend.
Important figures in the US yesterday showed the
number of Americans filing initial claims for jobless benefits increased by
12,000 last week, pushing the total number above the half million mark. It's
the first time since November that initial claims have been above the
500,000 mark. It was also the fourth increase in five
weeks and shocked analysts, who had anticipated a reasonable drop.
Initial jobless claims have declined steadily for the
past year from a peak of 651,000 in March
2009 as employers reduced the number of redundancies
and began hiring. Economists were looking for the number to fall below 425,000
and stay there before assuming that the economy was actively creating new jobs.
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 QROPS 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.
