Buybacks

QROPS update 7th December 2010 Pension Foreign exchange QROPS and QNUPS

Submitted by qrops on Tue, 07/Dec/2010

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 or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, 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, QROPS and now QNUPS (Qualifying non UK Pension schemes).

 

With no major data announcements released yesterday, focus remained on the euro zone and the struggling periphery nations. Euro zone finance ministers met yesterday to discuss the possibly of extending the €750bn rescue package that was put together early in the year after Greece became the first of the euro zone nations to get into a very serious financial position.

Ministers had differing opinions, in particular Angela Merkel who is the German chancellor, the biggest economy in the euro zone. She has previously said that she is against pouring extra money in a fund for the weaker nations and disagreed with recent bond purchases by the ECB.

Governor of the Dutch Central Bank and ECB Governing Council member Nout Wellink agreed and said,” It’s not up to the ECB to save countries where governments run the risk of becoming insolvent. We are not here to take over, on our balance sheet, the risks of the national economies of Europe.”

Later today, ministers from all 27 European Union states will meet in Brussels to discuss and give final approval for the Irish bailout of €85bn. The cheque has not been written yet as to receive the funds, Irish politicians must agree on a €6bn budget cutting plan. Prime Minister Brian Cowen heads a government with a minority standing and if recent press rumours are correct, there are many who will vote against the plans.

The euro strengthened towards the end of last week, as ECB bought Portuguese and Irish bonds after President Jean Claude Trichet assured investors that policy makers will delay the withdrawal of emergency liquidity. However with extra uncertainty just below the surface the euro weakened slightly yesterday against the pound. At lunch time the pound had reached €1.1821, 0.7% higher than Friday’s low of €1.1735 but still nearly 2 cents lower than Wednesday’s high of €1.1997 before the assurances of Trichet. The pound maintained a fairly consistent level again the dollar, being within 20 pips either side of $1.5675 throughout the entire London session.

The euro fell from Friday’s high of $1.3425 against the US dollar to close yesterday’s session at $1.3256. Technical analysts believe the euro’s inability to break resistance levels around $1.3445/1.3450 may force the euro back down to last week’s low of $1.2970 and potentially down to the August 24 low of $1.2588. This is worked out by studying charts and Fibonacci numbers and analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. A break above resistance or below support indicates a currency may move to the next level.

The Bank of England meets on Thursday and publishes the results of the monthly monetary policy meeting. In recent months we have heard nothing but speculation about the potential of further quantitative easing. With a run of positive data releases, above target inflation and Ireland deep in the red, the QE talk has disappeared. Thursday’s meeting is expected to result in interest rates being left on hold at 0.5% and no change to QE. The minutes of the meeting will be released on 22nd Dec and it will be interesting to see if eternal dove, Adam Posen is still voting for QE or if he has been talked out of it by the other 8 MPC members.

 

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 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.

 

 

 

 

Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Tue, 08/Jun/2010

For the Eurozone expat the €uro spot rates hitting €1.20+ to the £1 brings a welcome boost to currency exchange. 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.  

Continuing our daily look at factors affecting currencies allows 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.

The pound hit an 18 month high against the euro on Monday after reports were released about a restructuring of German bund and gilts, worrying investors and intensifying the concerns over the Eurozone and its single currency.

As well as suffering against the pound, the euro fell to a 4 year low against the US dollar after a Hungarian official said in a loose lipped statement that Hungary had only a slim chance of avoiding a Greek-style debt crisis. However, much criticism came about the highly negative way in which he spoke about Greece and the Eurozone economies as if no-one was listening.

Weaker than expected US employment data on Friday forced investors to sell off their risky assets, combined with a new European Union member facing problems, euros were sold in favour of the dollar.

At 11.15 am in London, the euro made back some ground against the dollar and traded at $1.1980, however it struggled to maintain this level and spent most of yesterday in the early $1.19’s.

At 3.30pm the pound reached a session high of €1.2179 against the euro, we have not seen levels this high since early November 2008, from when the pound had maintained levels around the €1.25 for most of the year before collapsing and heading down towards parity in late 2008.

Technical traders have suggested that the next significant level to watch is around the €1.2200 to €1.2240 mark, representing the October 2008 high and the 50 percent retracement of the 2007- 2008 downtrend.

Against the dollar the pound remained within limits seen over the last few weeks, making around 0.6% moving to $1.4555 after having slipped to a low of $1.4388 early in the session as a result of investors favouring less risky assets after Friday’s data and the Hungarian comments.

Traders said market speculation that Prudential would have to buy back sterling following the collapse of its bid for AIG's Asian arm was helping the pound to bounce on the day. Prudential were said to have put in a series of currency hedges, selling sterling to buy dollars, in anticipation of the deal going through.

British PM David Cameron said in press conference that the UK economy was in a much worse state than was first expected and “painful times lie ahead for the country”

On a brighter note, whilst the new government are not trying to paint a pretty picture, investors appear to be at ease with their measures and their commitment to tackling the debt problems.

For the time being this might be supportive for the pound whilst the recovery continues.

There was some positive news for the UK economy as British manufacturing output and orders grew at their fastest pace in 15 years in the second quarter. However, the Engineering Employers Federation said worries about fiscal tightening and the Eurozone economy have clouded expectations.

Looking ahead, trade data for April is published today, while the Bank of England's Monetary Policy Committee is widely expected to keep interest rates at 0.5% and continue the pause in its Asset Purchase Programme.

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 to avoid the offshore casino.

 

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