Foreign Exchange Report QROPS

Things are still volatile and we are in unique territory.  In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions and QROPS.  

Continuing our daily look at factors affecting currencies allows 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.

Sterling dropped by one percent against the euro and traded around a 14 month low against the dollar on Thursday due to investors being nervous about how policy makers will respond to the Euro zone debt crisis. Investors also continued to be nervous regarding news on potential spending cuts and are waiting to see of the emergency budget from George Osbourse will help to strengthen the pound or add further pressure.

The pound lost all the gains made on Wednesday against the dollar and extended fresh lows 14 month lows at 1.4225 after the release of weaker US leading indicators.

UK retail sales were released at 9.30am yesterday and the pound did little to react to the modest increase. Sales grew by 0.3% in April which was a slight improvement on what was expected. The office for National Statistics said clothing and shoe stores had seen strong growth; food sales were unchanged from the previous month.

"Although these figures were marginally better than expected, they confirm the broad picture of a fragile recovery that is still facing many obstacles," said David Kern, chief economist at the British Chambers of Commerce. It’s worth noting that April’s sales were up by 1.8% compared with April last year, this was also the case for March.

According to Howard Archer, chief UK economist at HIS Global Insight households still face “very challenging” times ahead with the possibility of tax rise and high unemployment as the new government seeks to improve public finances.

Elsewhere across the pond the stock market continued to fall sharply due to the problems in Euro land and disappointing U.S employment news. The number of Americans claiming for unemployment benefits rose unexpectedly last week, the largest amount in three months with an increase of 25,000 new applications, increasing the total number to 471,000. 

This was the first increase in five weeks and the biggest jump since February as many economists predicted a drop of around 4,000. On a brighter note employers are starting to hire again as payrolls rose last month by 290,000, unfortunately this is not the level to make a dent in the unemployment figures.

Gerard Associates Ltd advises expats and people considering living abroad on the options available for Pensions, QROPS 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.