GBP

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

• Bank of England policy maker Adam Posen spoke last night and said officials will increase their bond-purchase target next month if new forecasts for growth and inflation justify expanding stimulus again. “If we choose to do more in February, which we may or may not, but IF we choose to do more in February, it’ll be because the forecast demands it,” The central bank, which last expanded stimulus in October to £275bn with a program that is due to be completed early next month. 
• GBPUSD continued on a steady rise yesterday but the pound rally stalled at the $1.5600 mark as US stocks erased gains and turned negative in afternoon forcing the pair to stay in the $1.55’s
• Tomorrow, the BoE will publish the minutes of the January policy meeting, revealing how the MPC voted. The Office for National Statistics will release the first estimate of fourth- quarter GDP data at the same time
• The pound remained below the key €1.20 level against the euro and has seen further losses this morning dropping to a low of €1.1918.

ELSEWHERE

• The euro pushed through the $1.30 level against the US dollar yesterday, bolstered by optimism that Greece was set to cut a deal with its private sector investors on a debt swap. Despite no official resolution, the markets are beginning to gain confidence that an agreement will be reached. The main stumbling block at this point seems to be over what coupon creditors will receive on the planned new bonds. Some official say that Greece will pay not more than 3.5%, while creditors are pushing for more than 4%.
• The Greek talks are now expected to be concluded by the end of this week and with a lot of Eurozone data the euro could see more positive movements.
• Although the US Dollar sustained losses yesterday, it consolidated against its leading counterparts in overnight trade.
• Brazil will make room for a more “flexible” monetary policy as the government seeks to ensure economic growth of at least 4% this year. President Dilma Rousseff said he will cut enough of Brazil’s 2012 budget to ensure the government meets its target of a budget surplus before interest payment of 139.8bn reals ($79.7bn).
• Spanish economy minister Luis de Guindos said Spain is sticking to its deficit goal even as the economy shrinks, underlining a rift in the month-old cabinet whether the nation can halve its shortfall during a recession.  De Guindos said Spain’s government has an “absolutely inescapable commitment” to austerity, when asked whether he agreed with Budget Minister Cristobal Montoro’s call on Jan. 22 for the European Union to ease Spain’s 2012 deficit goal to take the shrinking economy into account.
• India’s rupee rose past 50 a dollar for the first time since November as the central bank left borrowing costs unchanged today to support economic growth.  The Reserve Bank of India kept its benchmark rate at 8.50% at 11 a.m. in Mumbai. The central bank cut the cash-reserve ratio for banks to 5.5% from 6%.

DATA TO LOOK OUT FOR (all times GMT)

• A host of flash Manufacturing & Services data from Europe this morning. Both French & German sets of services data have shown a increase in confidence.
• Eurozone Industrial New Orders are released at 10.00amg a contraction of 2.1%.
• UK Public sector net borrowing forecasted at 12.4bn from a higher figure of 15.2bn seen in December.
• Core retail sales in Canada at 1.30pm, they have seen steady sustained growth in this sector in the last three months and are expecting another modest figure of 0.2% growth today.
• Bank of England Governor Mervyn King speaks tonight at 8pm in Brighton.

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 made slight gains against the US dollar as a bank holiday in the US eased trade volumes, however GBPUSD remained close to 18 month lows as ongoing concerns about the Eurozone, and in particular the ratings downgrades leave risk appetite at a low.
• The pound remained over the €1.20 mark against the euro, driven by concerns following the European downgrades late last week as well as the weight of Greece and their next bailout.
• Sterling has been driven by safe haven flows and this was increased by the ratings downgrades as investors swapped their Euro government debt for UK Gilts instead driving the price down very close to a new record low.
• The UK treasury has this morning announced plans to make London the leading inter nation trading centre for trading the Chinese Yuan, saying that as a gateway to Europe London is the perfect base for Asian banking and investment.
• House prices in England and Wales fell by 0.8% on the month (+0.4% on the year) in January, according to property website Rightmove, to £224,060. In December prices fell 2.7% on the month, to £225,766 (+1.5% on the year). 

ELSEWHERE

• Following yesterday's news that the Euro was close to an 11 year low against the Japanese Yen the pair swiftly broke that new record following investors seeking the safe haven Yen falling to 97.04. The Yen gained against 13 of its 16 key trading partners giving an indication of the knock on effect of the Eurozone downgrade.
• In news this morning the European Financial stability Fund (ESFS) has lost its triple A credit rating following the downgrade of France and Austria last week. The rating was cut to AA+ from AAA, S&P had warned that it may face a downgrade if it's guarantors lost their triple A status.
• Concerns over the latest Greek bailout and whether it will go through may ease on Wednesday, following the stalling of talks due to a disagreement about how much money investors will lose by swapping their bonds. Talks between Greece's Prime Minister Lucas Papademos, Finance Minister Evangelos Venizelos, and Charles Dallara, the managing director of the Institute of International Finance, which represents private creditors, will resume Jan 18th.
• Canada's dollar rose against all but two of its 16 major peers on speculation its exports will benefit from accelerating U.S. economic growth. Reports on manufacturing from the Fed may show further growth later this week.
• In news this morning China's GDP fell to a 2 and a half year low but beat expectations posted allaying fears that China is set for a hard landing, this led to a selloff of safe haven currencies such as the US dollar and JPY and brought a touch of risk appetite back to the market.
• Off the back of the Chinese data this morning the Australian dollar posted some consistent gains against a host of currencies as investors foresaw a demand for commodities from China, Australia's biggest export market. 

DATA TO LOOK OUT FOR (all times GMT)

• A busy morning for data starts with UK Consumer Price Index figures and Retail Price Index figures at 9.30am. Inflation has been stubbornly high causing problems for the economy but today’s CPI reading is expected to fall slightly to 4.2% whilst RPI is forecast to fall to 4.8%
• Bank of England Governor Mervyn King speaks today at 10.00am.
• Eurozone Inflation figures are released at 10.00am, like the UK, annual inflation is expected to have fallen slightly to 2.8%.
• German ZEW survey is released at 10.00am and will give an indication of sentiment surround the German economy.
• Bank of Canada release their interest decision at 2.0pm, they are expected to leave rates on hold at 1%
• Westpac Consumer Confidence figures are released for December at 11.30pm

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 rose to a fresh 16-month high €1.2137 against the euro on Friday and looked set to stay supported as investors concerned about Eurozone sovereign funding pressures reached for the relative safety of the UK currency.
• Early on Friday, Halifax House Prices fell 0.9% in December, a moderate improvement was expected, however this did little to affect the pound.
• There was solid demand at UK gilt auctions earlier in the week, and BoE data also showed foreign investors increased their gilt holdings by £16.3bn in November, the largest monthly rise since September 2008.
• While supported versus the euro, the pound suffered versus a broadly strong dollar after the recent euro sell offs, investors have hedged the majority of their investment into the safe haven USD dollar, sterling fell around 0.7% to  $1.5376, but finished trading around $1.5415.

ELSEWHERE

• Eurozone data was mixed on Friday, Consumer, Economic and Industrial Confidence all showed minor gains.  However European retail sales were down from -0.1% in October to -0.8% in November, the YoY figure showed a downfall from -0.7% to -2.5%. German Factory orders were down significantly MoM from 5.0% in October to -4.8% in November.  Consensus estimated a fall to only -1.8%, meaning the fall in new and unfilled orders in Germany was down significantly.
• Today sees another Merkel-Sarkozy meeting, which will set the tone for the finance ministers’ meeting and leaders’ summit later in the month (23 and 30 Jan).
• Market players are likely to remain cautious ahead of Italian and Spanish debt auctions next week that are seen as those countries' first major refinancing tests of 2012.
• US Non-Farm Payrolls came in above consensus, showing 200k jobs were added in December, double Novembers figure and above the consensus estimation of 150k.  This encouraged a surge in USD purchasing on the view that US economic activity is picking up faster than in the UK.
• The US unemployment rate unexpectedly fell to 8.5%, the lowest since February 2009, from 8.7% although experts feel it could take up to three years to return to pre recession levels.
• The US dollar moved below $1.27 versus the euro, its strongest level since early September 2010. The euro has lost 5.1% versus the dollar over the past month and dropped 5.8% against the yen as investors sought refuge in safe havens, amid Europe’s sovereign-debt turmoil.

DATA TO LOOK OUT FOR (all times GMT)

• There are no significant UK data releases today.
• This morning, Eurozone Sentix investor confidence data will be released, expectations are that the figure will improve from -24.0 to -21.3 for November.
• At 11.00pm German Industrial Production figures are expected to show a decline from 0.8% in October to -0.4% in November
• Canadian CPI for December is released at 12.00pm, currently CPI stands at 2.9%.
• At 8.00pm US Consumer Credit Change data is expected to show a slight decline in borrowing from $7.65B in October to $7.30B in November

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.