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
· On Friday, PMI Construction comes in at 52.3 for November which is lower than the previous release but higher then market expectations the data was of little interest to the markets.
· Sterling falls from the early day’s high of €1.1658 against the euro during the afternoon to a session low of €1.1599, before recovering and then spent most of the day trading around the €1.1630 level.
· The pound rallied in the morning against the US dollar but fell back during the afternoon to trade between $1.5725 and the low of $1.5576 after investors booked profits on move higher in riskier currencies.
· Concerns grow that the UK economy looks vulnerable to a fall as a result of the Eurozone debt crisis with Mervyn King advising UK banks to build capital to insure against the “exceptionally threatening “ situation developing. .
· Speculation mounts in some camps the Bank of England may take additional steps this week to stimulate the ailing economy in the form of quantitative easing, which is currently standing at £275 billion.
· This morning PMI Services data in the UK was better than expected at 52.1 against expectations of 50.7, the services sector accounts for 75% of UK GDP.
ELSEWHERE
· The euro rose after a proposal to channel central bank loans through the IMF which may deliver up to €200bn to help control the regions debt crisis. Under the proposal, national central banks would recycle funds through the IMF, potentially to underwrite lending for Italy and Spain, the two most vulnerable countries right now.
· There have been four rescue packages over the past 19 months which have all failed to control the Eurozone debt crisis which fuels speculation that the single currency might break up unless European leaders forge a united front.
· German chancellor Angela Merkel called for European treaty amendments to create automatic court enforced sanctions on countries that overstep limits of 3% of GDP on deficits and 60% of GDP on debt.
· Concerns still mount that Spain will be next to have their credit rating downgraded.
· The Swiss franc fell for the third day in a row after Switzerland said it may consider additional steps to support the country’s central bank in its ongoing battle against the currencies appreciation.
· US unemployment dropped to 8.6% on Friday, its lowest level since March 2009 from 9.0% in October. US Non Farm payrolls climbed by 120k coming in roughly on par with estimates of 119k. Adding to the positive news, October’s NFP figure was revised upwards to 100k.
· The euro fell sharply against the US dollar on Friday afternoon to hit a session low of $1.3374
· Thursdays ECB interest rate decision will be important, suggestions are the markets are currently pricing in a 25 basis point rate cut. The euro’s seemingly unfazed strength over the last year has been largely due to higher rates, if a cuts continue into 2012, the euro will rely more heavily on data announcements and sentiment about the health of the Eurozone may have more of an effect.
DATA TO LOOK OUT FOR (all times GMT)
· German Chancellor Merkel and President Sarkozy meet today again to discuss in more detail the proposed rescue packages for the Eurozone.
· European retail sales is released at 10am which is expected to rise to 0.2% from -0.7%.
· US ISM Non-manufacturing for November is released at 3pm along with Factory Orders for October.
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Current Spot Rates (9.00am) |
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USD |
EUR |
AUD |
CAD |
CHF |
DKK |
NOK |
HKD |
SEK |
ZAR |
JPY |
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GBP |
1.5647 |
1.1641 |
1.5277 |
1.5908 |
1.4415 |
8.6562 |
9.0262 |
12.1570 |
10.53 |
12.52 |
121.972 |
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USD |
|
0.7439 |
0.9764 |
1.0167 |
0.9213 |
5.5322 |
5.7686 |
7.77 |
6.73 |
8.00 |
77.952 |
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EUR |
1.3442 |
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1.3123 |
1.3665 |
1.2383 |
7.4360 |
7.7538 |
10.44 |
9.05 |
10.76 |
104.778 |
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.