United Kingdom

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

• Sterling gained against a broadly weaker euro on Monday, ahead of an EU summit in Brussels, with investors cautious as talks continued between Greece and private creditors on a debt swap deal.  The pound pushed up from a day low 1.1901 to a day high 1.1974.
• Sterling fell against the dollar, tracking falls in EURUSD after a run of gains that have taken the pound above $1.57 from below $1.54 in mid-January. Traders and analysts saw levels above $1.57 as a good opportunity to take profit on those gains, which sterling fall to a day low 1.5654. 
• Sterling may come under pressure later this week if purchasing managers' surveys (PMIs) for January on the manufacturing, construction and services sectors add to the picture of a weakening economy and increase the prospect of more monetary easing from the Bank of England.
• Overnight GFK Consumer confidence gave Sterling a boost, as the figure showed an improvement to -29 in December, from -33 in November.  Sterling moved up from 1.5700 to 1.5774, its highest since November 21st after the data release.

ELSEWHERE

• EU chiefs arrived in Brussels yesterday to put the finishing touches on a German-led deficit-control treaty and to endorse the statutes of a 500 billion-euro ($656 billion) rescue fund to be set up this year.
• European finance officials began discussions on Sunday that a deal that Greece and its private creditors expect to complete in the coming days, after bondholders signalled they would accept government demands for a bigger cut in their debt holdings.
• European leaders failed to finalise Greece’s second aid programme because talks with banks over debt reduction aren’t completed, German Chancellor Angela Merkel said.  The Euro fell from a day high 1.3185  to 1.3076 against the dollar as investors sought safe haven currencies
• German Consumer Price Index figure for January showed a negative figure compared to December.  The -0.4% was down from 0.7% in December, but was slightly better than the estimated -0.5% expected.
• This morning German retail sales were significantly down, the figure was expected to be a positive 0.8%, however Decembers figure showed a -1.4% decline which was worse than the -1% recorded in November.
• US stocks fell, sending the Standard & Poor’s 500 Index lower for a third day, as European leaders sparred with Greece over a second rescue program.  Some investors believe “The question isn’t whether or not Europe goes into a recession, but how deep that recession is going to be,”
• An index of executive and consumer sentiment in the 17- nation euro area rose to 93.4 from a revised 92.8 in December, the European Commission in Brussels said today. That’s the first increase since February 2011, though it’s less than the median prediction of 93.8.
• The yen strengthened against all of its major counterparts as concern increased Greek bailout negotiations will hinder efforts to resolve the financial crisis, boosting demand for haven assets.  The yen appreciated 1.2 percent to 100.15 per euro at 10:08 a.m. in New York and touched 99.99, the lowest level since Jan. 23.

DATA TO LOOK OUT FOR (all times GMT)

• At 10.00am European Unemployment rate is expected to show a slight increase from 10.3% in November to 10.4% in December.
• At 3.00pm US Consumer Confidence figures for January are expected to show an improvement from 64.5 in December to 68.0

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

• Sterling started the morning session by trading in and around the $1.5650 level to later post a 5 week high at $1.5735 versus the USD.
• GBP/EUR hit a 4 week low on hopes of progress in Greek debt talks and worries about UK economic weakness posting a low of €1.1915 in the afternoons trading session.
• Analysts said poor fundamentals in the UK may limit any upside for sterling against the dollar, especially on the back of the release of the MPC meeting minutes on Wednesday.
• CBI figures released yesterday showed sales suffered their biggest annual fall in January since March 2009 (when UK was last in recession) posting a figure of -22 against a forecast -2.

ELSEWHERE

• USD has come under selling pressure after the U.S. Federal Reserve said on Wednesday it would keep interest rates near zero until late 2014 and the option for further QE still remains.
• EUR/USD traded as high as 1.3184 to its strongest in a month, stronger German consumer confidence contributed to this rally by easing concerns about a Eurozone recession.
• Japanese Yen rallied against the USD yesterday as US 10-year Treasury yields fell 2%, the dollar-yen pair is closely correlated with US debt with lower yields providing less incentive for Japanese Investors to seek income overseas, in turn strengthening the Yen.
• Italian 10yr bonds dropped below 6% (5.98%) for the first time since the ECB announced plans for emergency 3 year loans in December to prevent a credit crunch in the Eurozone.
• For the first ever, German 10 year bunds are selling at a lower yield that US Treasury bonds, yields are directly correlated to the risk attached to the investment and this turnaround in sentiment is significant as it shows despite the Eurozone crisis, Germany is still seen as safe bet.  a
• Low employment in Germany helped boost sentiment within the Eurozone for a 5th month in a row, morale in Germany should increase further in the month of Feb.
• EUR/USD repel negative EUR news including the continued rise in Portuguese bond yields and reports that the ECB is split on how to handle their holdings of Greek debt.
• There was also comments that a Greek deal could be close to with creditors ready to accept a lower coupon payment. A majority of these rumours end up being red herrings, so sceptical views remain about the accuracy.
• All 3 commodity currencies strengthened verses the USD amid the possibility of further QE from the US. The AUD and NZD both reached highs not seen since October and the CAD broke the parity line during yesterday’s trading. 

DATA TO LOOK OUT FOR (all times GMT)

• ECB President Mario Draghi, speaks today at 1.15pm
• US GDP is released today at 13.30pm, the market will be paying particular attention to this, from the release of the FOMC statement Wednesday evening, the data is expected at 3.0%
• US University of Michigan consumer sentiment figure, is released at 2.55pm and is expected to post a figure of 74.2 against last month’s figure of 74.0.   

Have a great weekend.

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.