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 hit its highest level in almost eight weeks
against the euro yesterday after speculation that monetary policy in the euro
zone would remain looser than in Britain.
Despite making gains against the euro, the pound fell
against the US dollar which took broad gains against a basket of currencies as
a slide in US shares suggested the markets were moving away from risky assets.
Analysts said weekly data showing a rise in bets
against the euro suggested it would remain weak versus the pound. The Bank of
England looks much less likely than the ECB to loosen monetary policy given a
run of strong UK economic data.
The euro fell to its weakest level since late June,
with the pound rising to a session high of €1.2275 after European Central Bank
Governing Council member Axel Weber said late last week the ECB should extend
its loose monetary stance.
The euro did make back some of its losses later in the
afternoon after a lack of follow through selling later helped push the euro off
its lows, traders said demand for the single currency around the €1.2270 level
was met by offers around €1.2230, helping to keep the pair within a range.
Gains against the euro helped lift the pound to a
fresh one-year high against a basket of currencies and its trade weighted index
rose to 83.1 early on Monday, following a climb on Friday.
Technical analysts say the next level for the pound to
reach is €1.2391, this is the June high and the highest the pound has reached
since November 2008. If this level is broken the flood gates may well open with
the pound potentially breaking the €1.25 mark.
Against the dollar the pound was slightly lower on the
day at $1.5510, pulling away from a session peak of $1.5620.
The pound was sold off along with other perceived
risky currencies as US shares fell. But it managed to stay above its 200-day
moving average at $1.5476, and technical analysts said trend was likely to
remain upwards as long as sterling continued to close above the 200-day average
mark. For it to extend gains, however, it would need to sustain a move above
$1.57, something it has struggled to do in recent days.
The euro traded fairly flat on the day against the
dollar, it hit a session high $1.2725 at 9.00am in London and remained within
0.3% falling only as low as €1.2661 throughout the session.
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.