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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 UK

• GDP figures released yesterday show the UK economy’s growth remains at 0.5% in the third quarter in line with expectations and matching the preliminary release. The breakdown of the data shows that underlying growth is weak as the growth was driving by a build-up of stock and government expenditure.
• UK markets reopened this morning to find GBPUSD hovering around its 7 week low of $1.5470; Cable has been finding support at $1.5450 and resistance at $1.5801 which was Monday's high. The pound has been recently affected by fears in markets which has triggered demand on the dollar as a refuge.
• Also pressuring sterling were comments from Bank of England policymaker Ben Broadbent, who said Britain risked sliding back into recession.
• The UK’s firm triple A status has been tempting investors for some time now and UK Gilts prices have fallen below the rates given on German Bunds for the first time since 2009.

ELSEWHERE

• Sentiment remained depressed in thin trading markets yesterday. EUR/USD lost all of Wednesday's gains after the mini summit between Merkel, Sarkozy and Monti failed to deliver any agreement on Merkel's reluctance to launch the Euro-bonds.
• Commodity-linked currencies also came under pressure against the dollar, with AUD/USD currently sitting at 6-week low of 0.9680
• Reports out on Wednesday said that a Greek default is now mostly priced into the market and therefore we would only see a limited euro depreciation, Italy is of more concern due to the uncertainty and size of the economy
• USDCHF showed volatile movements on the back of the mixed sentiment which gathered correctional movements and mounting concerns from the euro area, where volume was not high due to thanks giving holiday in the United States.
• In a business day for data from Germany on Thursday we saw the economy expand robustly in the third quarter, GDP expanded 0.5 q/q in line with estimates. This was then followed by the some positive news that confidence among investors unexpectedly grew in November due to less sceptical expectations.
• Portuguese efforts to come out of economic crisis suffered on Thursday as its credit rating was downgraded to ‘Junk’ status citing large fiscal imbalances, high debt and risks to its EU membership. This sent Portuguese 10-year bund prices surging to 13.85% - the second highest level in the Eurozone.
• Consumer prices in Japan declined for the first time in four months in October, as concerns over a deepening debt crisis in Europe and the impact of strong yen on the economy dampened domestic demand. Core consumer prices that exclude price movements in fresh food fell 0.1% in the year to October, in line with economists' forecasts, data from the Statistics Bureau showed Friday.

DATA TO LOOK OUT FOR (all times GMT)

• Today is a quiet day on the data front as a large portion of the US workforce will be continuing the Thanksgiving celebration and there are no significant releases in Europe.
• Bank of England MPC member Martin Weale will speak at the National Institute for Economic and Social Research.
• New Zealand is holding their 50th parliamentary elections.

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).

Tuesday saw the euro fall across the board, as weak German and euro-zone growth data

sparked concerns about a potential slowdown, damping risk appetite and boosting demand

for the safe-haven Swiss franc, yen and dollar.

Data showed Germany’s gross domestic product (GDP) growth slowed to 0.1% in the

second quarter, which was way below forecasts of 0.5%. On release of this, the euro

was pushed down more than 1% against the Swiss franc.

The euro zone’s GDP data showed the region’s economy grew by just 0.2% over the

same period, adding to pessimism over the currency block, already struggling with a

sovereign debt crisis which is only escalating. These concerns are likely to make investors

rather wary of the euro in the coming days.

The leaders of France, President Nicolas Sarkozy and Germany, Chancellor Angela Merkel,

were under pressure to show financial markets they are in agreement on doing more to

shore up the embattled currency union, or risk watching the euro zone unravel.

They had previously planned to meet this week to push ahead on their July 21 pledge to

come up with new proposals on euro zone economic governance, but the stakes were raised

when France was slammed in last week’s global market rout.

In early New York trading, the euro was down 0.4% versus the dollar at $1,43830,

with support around the $1.43511 level.

The pound pared losses against the US dollar, easing off the daily low after stronger than

expected UK inflation data prompted Mervyn King, the Bank of England Governor, to say the

central bank could raise rates to bring down inflation.

The UK Office for National Statistics said earlier that the rate of consumer price inflation

accelerated to 4.4% in July from 4.2% in June, above expectations for a 4.3% increase.

Core CPI, which excludes food, energy, alcohol and tobacco costs increased by a seasonally

adjusted 3.1% in July, broadly in line with expectations and up from 2.8% in June.

Over in the United States, the number of building permits issued fell more than expected in

July, official data showed.

In a report, the US Census Bureau said the number of building permits issued in July fell

3.2% to a seasonally adjusted 0.60 million, down from 0.62 million in June. Analysts had

expected a decline of 1.9% to 0.61 million in July.

US Housing starts also fell 1.5% in July to hit a seasonally adjusted 0.60 million, broadly in

line with expectations.

IN THE UK

• UK Consumer Price Index accelerates to 4.4% in July, up from 4.2% in June and beats expectations for a 4.3% increase.
• Bank of England Governor, Mervyn King, hints at potential hike in rates to curb inflation and didn’t rule out further QE.
• GBP/EUR hits a low of 1.1331 and a high of 1.1411 and GBP/USD hits a low of 1.6322 and a high of 1.6430

ELSEWHERE

• Euro falls across the board on the back of weak German and Eurozone growth data, sparking concerns about a slowdown and damping risk appetite
• Germany’s GDP growth slows to 0.1 percent in the second quarter, less than a forecasted 0.5 percent.
• GDP data from the euro zone showed the region’s economy grew by a mere 0.2 percent over the same period (second quarter).
• US Housing starts fell 1.5% in July to hit a seasonally adjusted 0.60 million, in line with expectations
• US building permits fell more than expected in July, by 3.2% to an adjusted 0.60 million, down from 0.62 million in June. Forecasts were for a decline of 1.9 percent to 0.61 million.
• In Australia, minutes of the RBA’s meeting on the 2nd August, showed that policy makers extended a pause on interest rates due to global growth concerns.
• Chancellor Merkel and President Sarkozy call for ‘true economic governance’ after their meeting to help combat the spiraling debt in the Eurozone.

DATA TO LOOK OUT FOR 

• All eyes on the UK and Bank of England minutes, due out at 09.30am. Will there be more policy makers in favour of either a rate hike or further QE, after CPI figures yesterday showed an increase to 4.4%.
• Also out at this time, is the UK Jobless Claims Change. Have unemployment benefits jumped or will it show UK labour market is gaining strength??
• 10.00am we will be open to the Core CPI figure from the Euro zone, expected to come out at 2.5%, still above their target level of 2%
• Over in America, at 1330pm, we will see the release of the July Producer Price Index, an early indication of inflation, as this measures the changes in the selling prices, producers charge for goods and services.

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 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).

The pound made gains against a basket of currencies yesterday ahead of the consumer price

index (CPI) announcement which showed inflation to be unchanged from April at 4.5%. Hawkish remarks made by Bank of England policymaker Martin Weale in a speech in

London was the main driver of sterling’s rise according to Reuters.

Weale called for interest rates to be raised sooner rather than later, which would eliminate

the need for tightening to be rushed in the long term. Sterling managed a 0.3% rise against

the dollar hitting 1.6441, before dropping back slightly and spending most of the day trading

around the 1.64 level.

The May CPI figures showed that food was the biggest upward pressure on inflation, while

the transport services offered the most significant downward movement. The deputy head of FX research at Credit Agricole, commented: “The Bank of Engfland has already talked

about inflation being at 5% at some point in the future so anything edging upwards

towards that level will not cause too many ruffles”

Sterling also made gains against the Euro helped by Weale’s comments and the ever looming

Greek debt crisis, helping GBP/EUR hit a fresh one week high of 1.1380.

Elsewhere across the pond we saw US retails fall in May for the first time in almost a year,

due in large part to a sharp drop in car sales official figures showed. Sales fell 0.2% from the

month before to $387.1bn, car sales fell 2.9% partly due to supply issues caused by March’s

earthquake in Japan. Despite this fall analysts said the said the sales were better than

expected and highlighted the increased spending against a year ago.

This weak figure caused the dollar to weaken against a basket of currencies damping the

demand for safe haven currencies, the dollar did however make gains against the Swiss franc

and yen. The dollar fell 0.4% to $1.4475 against the euro.

IN THE UK

• The pound strengthens as Martin Weale calls for interested rates to be increased, to avoid the need for rush tightening in the long term and sterling hits a week high against Euro at 1.1384 and GBP/USD hits 1.6441
• UK CPI inflation remains at 4.5% for May
• The pound is helped this morning by surprisingly high consumer UK confidence figures released overnight, the figure of 55 was far higher than the consensus of 41.

ELSEWHERE

• Greece debt issues continue to be a big influence on the markets. No agreement has been reached and different options are splitting officials across Europe.
• ECB governing council member Mario Draghi said he shares the ECB’s opposition to a restructuring of Greek Debt saying the costs would outweigh the benefits
• Eurozone Finance Minsters set to have an additional meeting on Sunday as well as planned Monday appointment to try to seek a suitable arrangement and Merkel and Sarkosy arrange to meet June 17.
• Moody’s are on the downgrade prowl again, this time it’s French banks SocGen, BNP, Credit Agricole who are at risk because of their direct exposure to the Greek crisis
• Dollar rises against the Yen and Swiss Fran ahead of US retail sales and maintained strength as the figures published were slightly better than expected.
• Swiss Franc falls as Government lowers its forecast for 2012 economic growth and says further currency appreciation poses a risk to its outlook

DATA TO LOOK OUT FOR

• UK unemployment out at 9.30am, a rise will weaken the UK economy and therefore have a negative effect on sterling
• Eurozone industrial production, this report measures the change in total inflation. When the result is higher it tend to have a positive impact on that currency
• At 1.30 the US Empire State Manufacturing
• US industrial production is out at 2.15pm, like the Eurozone when the result is higher it tends to have a positive impact on that currency

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.