Martin Weale

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

• Sterling gains against the majority of the majors, as investors find some relative safety in the UK which currently still holds its AAA rating, however the pound fell against the primary safe haven of the dollar to $1.5423 the its lowest since October 7th before recovering back to above $1.55, eventually finishing around $1.5470.
• The pound pushed briefly to a week high €1.1701 from the day low €1.1602 as the euro was sold off.
• After a quiet day for data all-round the main focus in the UK has been on the worry that economic growth in the UK is likely to have slowed, and ministers believe that the government face an uphill battle to meet targets. 
• BoE dove Martin Weale said Britain faces an appreciable risk of recession and there was a strong case for more quantitative easing once the current round of purchases was complete.  London and European stock markets finally finish up on the day on Friday after looking like they were going to post the 10 successive fall in a row.  
• Currently the pound finds itself back above the key psychological level on $1.55 again the US dollar, it is important to see if the pound can break past 1.5570 to see where GBPUSD is heading this week.

ELSEWHERE

• Germany dismissed talks of introducing Eurozone bonds and showed reluctance in allowing the ECB to get more involved in dealing with the bloc’s debt crisis. This caused a spike in borrowing costs of several countries including Belgium, Italy and Spain.
• The euro fell against the US dollar to $1.3211 its lowest level since early October, after investors opted for dollar based on its safe haven status.
• US consumers stormed the malls and took to the Web during Thanksgiving weekend, spending a record $52.4 billion at a pace that may be hard to sustain as the holiday shopping season gets under way.
• US stock futures rose, signalling the Standard & Poor’s 500 Index ended a seven-day losing streak after bumper US retail sales and speculation grew that European leaders will boost efforts to solve the sovereign-debt crisis.
• Moody’s Investors Service said the ‘rapid escalation’ of Europe’s debt and banking crisis is threatening all of the region’s sovereign ratings. Credit risks will continue to rise without measures to stabilize markets in the short term, the ratings company said in a statement today.
• IMF denies reports over the weekend in ‘La Stampa’ of plans to give Italy a €600 billion loan whilst it’s new Prime Minister Mario Monti implements financial reforms, despite the denial, the euro climbed to $1.3333 as investors read the information as positive for the Eurozone.  

DATA TO LOOK OUT FOR (all times GMT)

• 11.00am CBI Distributive Trades Survey is released in the UK, giving a snap shot of the retail and wholesale sectors. Analysts are expected the figure to worsen slightly to -12%
• German Gfk Consumer Confidence Survey is released at 12.00pm; this figure is also expected to weaken slightly to 5.2 as even the German economy begins to show signs of weakening.  
• New Homes Sales data is released at 3.00pm in the US.
• Overnight Japanese Retail Sales figures are published.

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).

There was a quiet day on the data front yesterday with analysts stating a lack of UK data meant the

markets were mainly driven by movements in risk appetite.

Sterling fell against a broadly stronger euro after French and German leaders promised to put a firm

plan in place to recapitalise Europe’s banks. German Chancellor Angela Merkel and French President

Nicolas Sarkozy offered no details of their plans but they pledged to do what was necessary to

support the banks, settle the Greek debt crisis and help growth within the euro zone, which resulted

in an increase to risk sentiment within the markets.

The pound fell from the early morning high of €1.1607 against the euro to end the session trading

near the low of €1.1453, a fall of over 1.4%.

Sterling performed better against a struggling dollar as it moved from the low of $1.5544 to end the

session trading near the high of $1.5683. This was mainly due to an advance in global stocks which

reduced demand for the greenback as a safe haven.

Sterling has recovered from the lows seen last Thursday after the Bank of England increased their

asset buying programme by £75 billion pounds a move which initially was seen as sterling negative

but now has been seen as a positive to stimulate the UK’s economy.

"Normally more QE would be negative for a currency, but given most of the major central banks are

contemplating more easing themselves, it's not weighing on the pound as much this time around,"

said Derks.

"The market is coming back to the view that a country taking affirmative steps to resolve its

problems is supportive for a currency," said the head of dealing for corporate and

institutional treasury at Investec.

IN THE UK

• Sterling fell sharply against a broadly stronger euro falling over 1.4% to end the session at a low of €1.1452.
• The pound gains against the dollar as investors move away from safe haven currencies and return to riskier assets reaching a session high of $1.5688.
• Analysts state that a lack of UK data meant the pounds moves were largely driven by swings in risk appetite.
• The negative sentiment towards the BoE’s shock increase to QE last Thursday is wearing off and is now seen as a positive to the pound.
• Bank of England policy member Martin Weale states on Sunday that there is still room for more QE, as Britain’s economy struggles in the face of fiscal austerity and the deepening on the euro zones debt crisis.

ELSEWHERE

• The euro performs well as Sarkosy and Merkel’s plans are digested, between them Germany and France promise to put a plan in place to recapitalise Europe’s banks, settle the Greek debt crisis and help growth in Europe.
• The details of this plan will not be released until the end of October.
• The euro rose by the largest daily gains in more than a year against the dollar moving from the low of 1.3392 to trade at the high of 1.3698 a movement of over 2.4%.
• France breathes a sigh of relief as Moody’s and S&P confirmed their AAA rating with stable outlook.
• Slovakia is the last member state of the EU left to vote on of the EFSF, their government meet today, most expects expect them to follow suit and vote for an approval of the new terms.
• UK media this morning report that Spain is unlikely to meet its deficit target, the Spanish economy is far too big to simply bailout and if this prediction is correct it will provide another much larger headache for European Finance Officials.
• Greek Finance Minister says Greek haircut more likely to be around 60% rather than the previously agreed level of 21% in July

DATA TO LOOK OUT FOR (all times UK BST)

• This morning UK Manufacturing Production figures are released expectations are to see an increase of 0.1% MoM the same rise seen in July.
• UK Industrial Production is also expected to increase to 0.4% MoM following Julys 0.2% fall, which could support the pound.
• In the US they release the budget balance data this evening at 7pm which is expected the see the US fed budget deficit move to $1.294trn for the 2011 fiscal year.

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).

A difficult week last week for sterling culminated in sterling continuing to lose ground across

the board on Friday. Sterling fell to a session low against the dollar following Fed chairman

Ben Bernanke speaking publicly at the Jackson Hole press conference. Bernanke offered no

news on fresh stimulus to stimulate the US economy and this led to dollar strength due to its

safe haven status.

The markets had been anticipating Bernanke’s speech all week hoping that he might make

specific reference to further monetary easing but they were disappointed. In actual fact

Bernanke said that the Fed had tools available to them but gave no indication when or if

they would decide to use them.

In the UK the ‘drip drip’ of poor data we had seen all week last week showed no sign of

abating following the release of UK growth in the second quarter. The 0.2% reading was

bang on consensus and offered no support to the ailing pound. Sterling was down around

0.3% for the day on Friday at a session low of $1.6236, falling from around $1.6300

before Bernanke's speech. Technical analysts highlighted support from sterling's 55-day

moving average at $1.6224.

Against the euro it was a very similar story, the poor UK data put pay to the recent sterling

strength with GBP/EUR falling significantly during the week, closing on Friday at €1.1275

having started on the plus side of €1.1450. Even without the poor data the pound has also

been hampered by the market's view that UK interest rates are likely to be kept on hold

through 2012, with some thinking more quantitative easing may be needed to support the

British economy.

Bank of England policymaker Martin Weale told a regional newspaper on Friday he does not

see any need for quantitative easing at the moment, but does not rule it out, and would

engage in further stimulus if the economy worsened substantially.

IN THE UK

• Sterling loses ground across the board on Friday
• The GBP/EUR falls to €1.1260, the lowest level seen since August 10th.
• The UK’s 2nd release of Q2 GDP figures was confirmed at 0.2%, overall matching consensus but with a slight downward revision to production industries offset by marginally stronger service sector growth.
• The data did little to change investors overall view of the UK economy and the pound remains under pressure.
• A slight relief to the pound this morning came in the form of Mortgage Approvals for July, the figure rose to 49.23k, above the consensus of 49k

ELSEWHERE

• Initially on Friday the US dollar gained against sterling but later reverses gains moving from the low of $1.6207 to end trade near $1.6345.
• US personal spending increases to 0.8% in July.
• Relief that the damage inflicted by the recent hurricane on the US east coast was less serve then first expected, this provides a major boost for risk assets.
• The Dow Jones rises 255 points to close at 11,539.
• In the Eurozone Greece’s biggest banks Eurobank EFG and Alpha Bank have announced they are to merge, this is positive news for struggling Greece as the government have encourage banks to pool resources to help deal with the current debt crisis.

DATA TO LOOK OUT FOR

• At 3.00pm this afternoon Consumer Confidence figures in the US are released. The markets are expecting a dramatic fall to 52.2 from 59.5 as the struggling US economy begins to hit the consumer.
• Minutes from the Fed’s August 9^th interest rate decision meeting are released.
• Overnight Gfk Consumer Confidence figures in the UK are released, the figure is expected to remain around the -30 mark.

 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.