qrops

qualifying recognised overseas pension schemes

6th August 2010 Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Fri, 06/Aug/2010

We continue our daily look at factors affecting currencies allowing 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.  

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.   

Sterling received little or no help from economic data, in a day that saw both a rise and a fall against the Greenback. Technical analysts commented that the pound had run into resistance at the $1.5968 level on Tuesday which is when it hit its highest level in six months.

As expected, The Bank of England kept interest rates at a record low 0.5% and kept quiet about any new quantitative easing measures. The uncertainty surrounding an economic recovery and the damaging effects from the various cuts of the budget was more than enough to sway the minds of the members of the Monetary Policy Committee.

The positive movement for the pound came off the back of Euro declines which in turn had its own rally on positive news out of Europe. Support has come off the back of a run of positive UK economic data releases and a healthier fiscal outlook.

The negative trend occurred when traders digested the figures released by Barclays; the bank reported a 44% rise in half-year profits, which despite beating market forecasts was over shadowed by a slowdown in the second quarter in their investment division with the top-line income standing at £3.38 billion, a 15% drop from the previous quarter.

The Euro received a boost from three of its member countries. German industrial orders rose 3.2% in June which was over and above expectations and was fuelled by strong demand from overseas. Further support came in the guise of a successful Spanish debt auction and some positive sounds from the International Monetary Fund regarding Greece’s progress in reducing its deficit completed a trio of supporting data for the single 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 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 for your security.

5th August 2010 Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Thu, 05/Aug/2010

We continue our daily look at factors affecting currencies allowing 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.  

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.    

The recent run of strong UK data has seen sterling make gains across the board over the last couple of weeks. Yet this run seemed to ground to a halt as the UK saw a weaker than expected reading of the UK services sector, it highlights the UK economy may struggle to match the growth it achieved in the first half of the year. The official reading grew in July at its slowest rate in 13 months achieving a reading of 53.1 from 54.4 in June.

The pound reached a day high of €1.2081 up from the low of €1.2041 against the euro.

Against the dollar sterling reached a session high of $1.5962 just down on the 6 month high of $1.5968 achieved on Tuesday but was still up for the session low of $1.5863. The dollar is still under broad selling pressure over the ongoing concerns of the US economy’s recovery especially after speculation we may see the Federal Reserve take further steps to try to lower borrowing costs. But many analysts believe there is a key resistance level at $1.5968 and we may see sterling struggle to push through that level into the $1.60’s.

The pound also found support from a rise in UK house prices which were up 0.6% in July and showing a recovery from the fall we saw in June. The recent reports from some of the major UK banks have all lifted sterling’s outlook with many banks reporting substantial profits on the half year; these banks include Lloyds, HSBC and Northern Rock. These are all positive signs for the UK as a country we are heavily reliant on the banking sector.

Elsewhere the US saw some positive non manufacturing data which came in at 54.3 higher then expectations of 53.8, this was followed by better than expected employment data which came in at 42k against the previous figure of 13k, this helped the dollar make gains against sterling in the afternoon session as it re traced some of its losses by 0.5%.

In the euro zone retail sales were released for both Month on month and Year on year for June. The reading came in lower at 0.0% against the last reading of 0.4% the Year on year figure fared better coming in at 0.4% against expectations of 0.1%.

All eyes will be on the Bank of England’s two day monetary policy meeting which started yesterday, today they will release their interest rate decision with many believing we will still see a hold of interest rates are the current record low of 0.5% (confirmed). What will be of interest is to whether any other policy makers agree with Andrew Sentence into voting for a rate increase to 0.75%.

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 for your security.

 

4th August 2010 Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Wed, 04/Aug/2010

We continue our daily look at factors affecting currencies allowing 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.  

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.    

Sterling rose to a 6 month high against the dollar yesterday, as recent positive economic data and strong banking figures increased appetite for the pound.

Major Bank HSBC, recorded profits of £7bn through the first half of 2010, and even so called ‘bad bank’ Northern Rock made a £167m profit compared to a £243m loss this time last year. This is all hugely positive for the UK economy and sterling, as a major part of outside investment into the UK, is determined by the performance of the banking sector.

The banking profits along with the recent positive 2nd quarter GDP figures and strong manufacturing data have helped rally sterling over the past few weeks, and after concerns about the US economy slowing and possibility for further monetary easing by the US Fed, sterling rose to a 6 month high $1.5968.

Sterling is pushing close to the $1.60 level; this level is deemed to have a strong psychological barrier, and as analysts believe that there are many options barriers around this level it will take some fresh impetus to breach this level.

Against the euro sterling pushed close to €1.21 reaching a day high of €1.2088, but dropped slightly across the board after UK Construction Purchasing Managers Index fell to a four month low of 54.1 in July, from 58.4 the previous month. This is usually a well overlooked figure but given the 0.4% addition to last month’s GDP figures from construction alone, this was seen as an important indicator of future results.

By the close of UK trading sterling was trading at around $1.5930 still 0.3% up on the day, and was down a fraction trading around $1.2039 against the euro.

Investors await the results from today’s UK Services Purchasing Managers Index (PMI) which is expected to maintain its growth above the 50.0 growth level. Last month’s figure came in at 54.4.

Euro zone retail figures for June are released today at 10.00am, the euro continued to gain against the dollar reaching a 3 month high $1.3262 after the US Fed’s earlier announcement.

Analysts are now trying to get an indication as to who will increase their interest rates first. The US were expected to be the first but look the least likely after the Fed’s announcements but markets have seen shocks in the past. So any hints from policymakers will be sure to have an effect on investor bets. The Bank of England monetary policy decision is on Thursday, but the main focus will be on the quarterly outlook view, which will be released next week.

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 for your security.

3rd August 2010 Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Tue, 03/Aug/2010

We continue our daily look at factors affecting currencies allowing 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.  

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.    

Sterling started the European session yesterday moving forward having made gains during Asian trading. Sterling’s trade weighted index against a basket of currencies hit an 11 month high, in particular a 6 month high against the US dollar and 1 month high against the euro.

Data compiled by the Bank of England that tracks the pounds value against a basket of currencies held by the UK's main trading partners rose to 82.7, the highest since September 2009.

The rise came mainly from broad based risk appetite as European shares soared after HSBC reported first half profits doubling to £7bn causing their share price to climb by 5.2%. Given the UK economy’s dependence on the financial services sector, any rise in this area was followed by with investor confidence. UK shares rose across the board by 2.5% with the pound following suit.

The pound rose as a many analysts are beginning to adjust their view on the UK economy. UK manufacturing expanded for the 10th consecutive month, despite being below last month’s figure of 57.6, the posted figure of 57.3 was better than expected.

British economic data has beaten economists’ expectations since April, according to an index of economic surprises compiled by Citigroup Inc.

By 5.00pm the pound was up 1.2% against the US dollar, hitting a high of $1.5904 from session open of $1.5722. Against the euro it rose to its highest since July 5th to €1.2110 at 12.30pm roughly 0.8% up from the open, before retracing gains to finish at €1.2050.

The euro made gains throughout the day against a broadly weaker dollar to rise to a high of $1.3190 the highest since May 3rd, breaking a key technical level around $1.3125.

The pound extended gains after it closed above its 200-day moving average around $1.5542 on Friday, while making a clear break to $1.5636. This 50% retracement of its peak-to-trough move between August 2009 and May this year.

Technical analysts said the pound's next target was $1.5970, the 61.8% retracement of the November 2009-May 2010 fall.

The pound’s value has a lot of negative news priced in and as the data releases improve, the bad news dries up, meaning there are less traders who strongly dislike the pound. The commodity Futures Trading Commission showed the number of wagers by hedge funds and other large speculators on a decline in the pound against the dollar had dropped significantly.

If the data releases continue to improve then the pound will appear cheaper and cheaper. The only potential fly in the ointment is whether the economy can weather the restrictive austerity plans the Government has put in place for the duration of this parliament.

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 for your security.

2nd August 2010 Pension Foreign Exchange Report QROPS & QNUPS

Submitted by qrops on Mon, 02/Aug/2010

We continue our daily look at factors affecting currencies allowing 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.  

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.    

Sterling hit a new five month high against the US dollar on Friday; it was driven by an increase in risk appetite at month end. Investors were unconvinced that weak US economic data meant that the US was set for a double dip recession, driving risk appetite higher.

Official data showed the U.S. economy grew 2.4% in the second quarter. While the figure was weaker than forecasts, some in the market were pleased to see an upward revision in growth for the previous quarter.

By late afternoon sterling had climbed to $1.5697 its strongest since mid February.

Sterling was also given a helping hand by Merger & Acquisition - related demand after an offer by billionaire Li Ka-Shing to buy UK power grids from France's EDF for £5.8 billion.

Over the weekend the month end demand to sell dollars continued to push sterling higher against the Greenback with a weekend high of $1.5782 hit first thing this morning.

Sterling was also doing well against the Euro with the Euro falling to its weakest in about a month, falling nearly 1% on the day. On Friday sterling topped 1.2035 in afternoon trade, however, similar to the US dollar, the weekend trade proved positive for sterling with a fresh high of 1.2071 hit at 08.30 this morning.

Sterling was poised to end the week well above $1.5545, the 200-day moving average which the UK currency broke above earlier last week. Analysts said that this would maintain upward momentum for the UK currency.

To end the month a survey at the end of last week showing UK consumer confidence at an 11-month low in July was largely ignored by sterling. It followed weak UK housing data on Thursday but it contrasted with recent upside surprises in UK data with second quarter GDP and July CBI retail sales the standout releases which have helped sterling finish the month on the front foot. 

The week ahead 

UK PMI this morning and the next few days for construction and services, tomorrow we have the Halifax house prices. On Thursday we have a UK interest rate decision and a busy day Friday with a host of data most notably Producer Price Index. 

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 for your security.

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