council member

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.

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 US Dollar closed Friday’s trading session virtually unchanged. The economic day was mixed with fundamental data on balance fairly positive, but news from Europe dampened the mood. Firstly looking towards Europe there is growing discontent with the region to the debt crisis and the potential for a Euro bond ahead of the EU summit this week. US import prices, the trade deficit and the consumer sentiment all beat expectations. In addition Moody’s confidence that the nation won’t be at risk for a downgrade for at least 18 months looks a little more optimistic. The economic calendar is quiet today ahead of tomorrow’s FOMC meeting.

The Euro remained fairly stable on Friday despite the growing discontent within the region. ECB’s council member Ewald Nowotny suggested an unwinding of liquidity measures was necessary and French President Sarkozy echoed Merkel’s tone that no bailout expansion or Eurozone bond would be passed. Adding to the uncertainty the IMF held off on passing its €22.5 billion loan to Ireland until after the nation’s parliament put the support to a vote. The docket is quiet today; however, ECB president Trichet is set to speak after the European market close.

The British Pound moved to a fresh week high against the US Dollar and has been advancing slightly under the radar of late. A report by the U.K. Office for National Statistics showed producer prices grew at an annualised pace of 3.9% in November amid forecasts for a 4.0% expansion, while the core rate advanced to 3.2%. Overnight UK House Prices dropped for the second month, sliding 3% in December according to a report from Rightmove. Today the economic calendar is fairly light.

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.

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).

Sterling received a mixed reception in the markets on a day that saw it hit a five month low against the Euro whilst continuing to be the more vulnerable of the currency pairing. With the single currency having been helped by Tuesday’s comments from ECB Governing Council member Axel Weber, it didn’t take much for GBP to be pushed lower.

Figures outlining the UK labour market were semi-contradictory; the number of Britons claiming jobless benefits last month rose by 5,300 to 1.47 million , yet the wider measure of the unemployment rate dipped in August to its lowest in more than a year.

Underlying fears remain that if positive signs do not start to emerge within the employment market it may prompt a fresh round of QE from The Bank of England. This in turn would have a detrimental effect on the pound as the printing of more money merely further reduces its’ value.

“The data is mixed overall but scratch under the surface and there are signs that the labour market is coming under increasing pressure from slowing growth and companies’ mounting concerns over the economic outlook,” said Global Insight.

Positive noises came in the form of the UK’s consumer price index with it posting a 3.1% figure in September, nudging in more than a percentage point above the 2% target set by the Bank of England. This could be interpreted as an argument against adding more stimulus as it could encourage inflation, although this would not be seen as a sufficient deterrent to sway the Banks’ medium term outlook.

An additional boost for GBP came in the form of news that Standard Chartered Bank was launching a $5.3 billion rights issue which would require overseas investors to buy the pound.

The Greenback failed to rally off the back off weak UK consumer confidence data as it backtracked under the pressure of the Federal Reserves’ expectations of more quantitative easing. The minutes released from the Feds’ 21 meeting showed policymakers focused on buying additional longer-term Treasury securities. Their second focus was to prepare the public for higher inflation in the near future and thus to cut back on its’ main fuel, i.e. spending.

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.