At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

IN THE UK  

In a report released by the British Chambers of Commerce today, the UK economy will probably avoid a recession this year and the government needs to do more to increase lending to help a “weak” recovery. GDP is expected to rise 0.3% in the first quarter after a 0.3% drop in the last three months of 2011. The BCC forecast annual growth of 0.6%, less than the 0.8% predicted by the government.

GBPEUR broke through major resistance levels yesterday in a mid afternoon spike, reaching a high of 1.2056. However it soon subsided to the low of 1.1977 which was 10 pips lower than markets opened.

Sterling achieved a 10 week high against the US Dollar, touching 1.6062 after UK Manufacturing PMI hit a ten month high. Cable has strong support at 1.5770 and this latest breakout has shifted focus to the October high at 1.6150.

After positive PMI Construction figures released this morning, the focus is now on the more important Services sector PMI tomorrow for further evidence of economic health. Stronger data for the services sector, which accounts for roughly 70% of the economy, could trigger further short-term gains.

WORLDWIDE

EURUSD reached a high of 1.3380 in yesterday’s session and a low of 1.3278, the euro fell almost 0.5% mid-afternoon after positive US Manufacturing data but recovered to close back over 1.33.

In the US, the ISM manufacturing PMI rose in March from 52.4 in February to 53.4 and beat forecast by 0.4. This made it the 32nd consecutive month of expansion in the sector. After the strong release GBPUSD dropped back to trade below 1.60, but this correction only lasted around one hour before sterling rallied back above 1.60 again.

US Construction Spending MoM for Feb fell short of expectations, posting a 0.3% drop to -1.1% compared to a forecasted 0.6%.

European unemployment for February increased in line with consensus, up by 0.1% from the previous 10.7% January release.

The Foundation for Economic and Industrial Research (IOBE) released a worrying report on the Greece’s economic outlook. Conclusions included an underestimation of GDP contraction being revised to exceed 5% for 2012, a 2.7% rise in unemployment to 20% this year and inflation to ease by 2.1% to 1%.

Irish Manufacturing PMI expanded for first time in 5 months, most likely due to increased export demand from the US. This will be a relief after the Irish economy slid back into recession in late 2011 for the first time since 2009.

Australia's central bank left interest rates unchanged as expected, currently held at 4.25%. GBPAUD dropped back to 1.5323 from 1.5387 after the news, however sterling has recovered that loss and opened today’s session at 1.5412.

HSBC Holdings said yesterday that The Norwegian central bank may have to impose a Swiss-style cap on the Norwegian krone to curb its strength against the euro.

DATA RELEASES (GMT)

INTERBANK RATES (09.00 GMT)

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

IN THE <?xml:namespace prefix = st1 />UK

• Moody’s hit the headlines this morning as the US credit ratings agency changes the UK outlook to negative and warns they may be stripped of their top AAA rating because of risks to GDP growth from the effects of the Eurozone debt problems.
• The pound started Monday morning at the session high of $1.5826 against the US dollar before steadily falling below the $1.58 at the European close, overnight the pair has seen further losses touching $1.5684.
• GBPEUR traded within a tight range, starting the day at €1.1923 and ending at €1.1952
• Data released this morning showed UK inflation is falling in line with expectations; the Consumer Price Index fell to 3.6% from 4.2% whilst Retail Price Index fell to 3.9% from 4.8% last month, this has had a fairly muted effect on pound value.

ELSEWHERE

• The German government welcomed the Greek approval of additional austerity measures but again demanded that the Greek political leaders affirm their support for the cuts.
• Eurozone finance ministers meet tomorrow at an emergency meeting to hear details of how Greek will find an extra €325m worth budget cuts to bring the total to €3.3bn in the next year.  
• EUR/USD hit a high of $1.3283 during the London session as terms of the Greek bailout looked to be agreed, but moved back towards $1.32, after both S&P and Fitch moved to downgrade Spanish banks yesterday afternoon.
• US President Barack Obama released his fiscal year 2013 budget, securing about $3 trillion in deficit reduction over ten years.
• The Obama budget project is looking for $1.5 trillion in additional revenues with much of this coming from tax’s on workers incomes of more than $250,000
• Overnight the Bank of Japan kept interest rates unchanged at 0.1% as expected but surprisingly increased its asset purchase facility to 65 trillion yen and set an inflation target of 1.0%.
• The US Dollar pushed higher against most currencies in overnight trade as stocks declined, driving demand for the safe-haven currency.
• Along with the Moody’s announcement to put the UK on credit watch, both Italy and Spain’s credit ratings were reduced to A3 causing EURUSD to fall to €1.3150 in Asian trading early this morning.

DATA TO LOOK OUT FOR (all times GMT)

• Industrial Production figures are released this morning in the Eurozone.
• In the US we have Core Retail Sales as well as Retail Sales (month on month) which is the primary gauge of consumer spending. 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.

At Gerard Associates Ltd we continue our daily look at factors affecting markets and currencies allowing some insight into conditions affecting exchange rates.

Cash and income timing from a UK Pension income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, QROPS and investment income taken.

Investment market volatility and currency exchange remains a challenge. The global economics are volatile and unprecedented in history. Currency exchange continues to concern expats with UK Pensions, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

IN THE UK

• Asking prices for a property in the UK declined for the second consecutive month in December, the latest survey by Rightmove showed early this morning. The Rightmove House Price Index, a leading indicator of residential property prices in England and Wales, dropped 2.7% (MoM) in December, following a 3.1% fall in the previous month. Annually, asking prices rose 1.5% in December compared to 1.2% increase in the previous month.                                                                                                                                                            

• GBPUSD was around the $1.549 area this morning as dollar continued to receive safe haven status as the European solution looking less and less likely in the medium term.                                                                                               

• Against the euro, sterling has found some relative safety as a 'buy only' pair and on Monday morning continued to hover around the €1.19 level.

ELSEWHERE

• On Friday, Fitch become the latest ratings agency to cut its outlook on France's AAA rating and said it might downgrade the ratings of Italy, Belgium, Ireland, Spain, Slovenia and Cyprus blaming any comprehensive solution to the European debt crisis.

• Fitch also downgraded the long-term credit ratings on six major banks including US banks Goldman Sachs, Bank of America, Morgan Stanley. Fitch cited the issues facing the banking sector and the exposure these banks have to the European debt crisis.

• Fellow rating agency Moody’s downgraded Belgium’s sovereign credit rating by two notches from Aa1 to Aa3.

• Italy's new government won a crucial confidence vote, paving the way for sweeping austerity. However, Italian Prime Minister Mario Monti took a veiled swipe at German Chancellor Angela Merkel for the pound of flesh demanded in return for financial help. Monti said the sovereign debt solution "should be wrapped in a long-term sustainable approach, not just to feed short-term hunger for rigor in some countries," in reference to Germany's insistence on crippling austerity measures for big debtors.

• The Eurozone Trade surplus fell to €1.1bn in October from €3.1bn in the same period of last year, Eurostat said Friday.

• The US Dollar held its ground versus the euro on Friday, bouncing back from modest early losses after Fitch became the latest ratings agency to warn on some key European nations. EURUSD this morning was not far from Wednesday's 11 month low of $1.2944, currently $1.3010.

• US consumer prices held steady in November in news overshadowed by the Eurozone on Friday. The consumer price index for November was unchanged from October levels, which showed a 0.1% decline from September. Most economists had predicted a slight, 0.1% increase in the cost of consumer goods.

• The Reserve Bank of India on Friday opted to maintain its key rate unchanged, thus stalling a rate-tightening spree, in a bid to support the depreciating rupee. The central bank headed by Governor Duvvuri Subbarao maintained the repo, the rate at which it lends to banks, at 8.50% and the reverse repo, the rate at which the central bank borrows from banks, at 7.50%. Economists had anticipated the decision, as inflation has slowed and industrial production dropped for the first time in more than

two years.

• On Sunday night North Korea's state leader Kim Jong-Il passed  away after suffering a heart attack. The most exposed currency pair is USDJPY which rallied from 77.86 to 78.16 upon the news but didn't last long and retracted back below the 78 level. The US dollar was initially bought up on the political uncertainty.

DATA TO LOOK OUT FOR (all times GMT)

• At 3.30pm, ECB President Mario Draghi is speaking before the European's Parliament's Economic and Monetary Committee in Brussels

• GBP Consumer Confidence is out later today which is a leading indicator of consumer spending. The figure is expected to show a fall from 36 to 34 as conditions tighten up.

• Overnight in Australia we have the Monetary Policy Meeting minutes which shows a

detailed record of the Reserve Banks most recent meeting, Australia’s interest rate

was cut from 4.5% to 4.25% in the first back to back reduction since 2009.

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.