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
- The Bank of England as expected left rates unchanged at 0.5% and Quantitative easing at 275bn creating some relief and helping sterling climb to $1.5408 early this morning from the three month low of $1.5279 hit yesterday.
- Most traders still expect the Bank of England to extend quantitative easing at the February meeting, which is acting as black cloud over the pound’s head, any comments suggesting this in the coming weeks will weaken sterling.
- Sterling tumbles against the euro as successful Spanish and Italian debt auctions bring some relief to the euro, sterling has already fallen to a low of €1.1936 this morning
- UK Industrial output falls 0.6% in November, heightening concerns over the strength of the economy.
- George Osborne debates on whether Scotland should use the pound or the euro if there were to become independent. Alex Salmond’s says Scotland would initially use the pound and enter into the euro at a later date. Osborne thinks this plan will fall apart.
- Sterling continues to fall against the AUD, already hitting a low of AU$ 1.4837 this morning
- UK Producer Price Index reveal slightly worse than expected figures, all components fell however this has not affected the pound so far.
ELSEWHERE
- Spanish and Italian debt Auction go better than expected yesterday, Spain sold double the targeted amount and raised €10bn whilst Italy raised €12bn. In response, the euro strengthen across the board with EURUSD moving back above $1.28, hitting a high of $1.2878 this morning.
- Following the auction, the benchmark Italian and Spanish 10-year bond yields fell respectively to 6.55% and 6.08% in the secondary markets
- In their monetary policy meeting, the ECB as expected kept rates unchanged at 1%, Draghi’s comments helped the euro as he indicated there were signs of stabilisation in the Eurozone and suggested no immediate plans for a further rate cut.
- China’s foreign exchange reserves drop for the first time since 1998, falling to $3.18 trillion on Dec 31 from $3.2 trillion Sept 30 as foreign investments moderate, trade surplus narrow and Europe’s crisis spurred investors to sell emerging market assets.
- The US dollar was hit by the European bond auctions going better than expected as investors fly out of the safe haven and move to riskier assets.
- US unemployment benefits jumped last week rising to a six week high of nearly 400,000 jobs
- US retail sales continued their upward crawl in December, rising 0.1% in the month according to initial estimates
DATA TO LOOK OUT FOR (all times GMT)
- European trade balance for November is released at 10.00am.
- US trade balance is due out at 1.30pm and is expected to come in at $43.47bn which is lower than the previous figure of $45bn
- At 2.55pm, the Michigan Consumer Sentiment Index is released, the recent good run of US data is expected to have push sentiment up to 71.5 from 69.9.
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Current Spot Rates (9.00am) |
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USD |
EUR |
AUD |
CAD |
CHF |
DKK |
NOK |
HKD |
SEK |
ZAR |
JPY |
|
GBP |
1.5346 |
1.1954 |
1.4826 |
1.5623 |
1.4466 |
8.8938 |
9.2179 |
11.9157 |
10.63 |
12.37 |
117.676 |
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USD |
|
0.7796 |
0.9661 |
1.0181 |
0.9427 |
5.7955 |
6.0067 |
7.76 |
6.93 |
8.06 |
76.682 |
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EUR |
1.2827 |
|
1.2403 |
1.3069 |
1.2101 |
7.4400 |
7.7111 |
9.97 |
8.89 |
10.35 |
98.441 |
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.
Authorised and Regulated by the Financial Services Authority
