Pension Foreign Exchange Report QROPS & QNUPS

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.  

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 rose yesterday making up some of its recent losses against the dollar after investors bought back the currency after the view was it had been oversold on Tuesday. It reached a session high of $1.4605 up from the day’s low of $1.4397 after some risk appetite returned to the market.

Sterling suffered on Tuesday after ratings agency Fitch highlighted Britain’s fiscal deficit and mentioned Britain will face an uphill battle to reduce government borrowing and they would need an ambitious plan to reduce the deficit that currently stands at 11% of economic output. All eyes will now be focused on the upcoming emergency budget on the 22^nd of June which if shows clear plans to tackle the deficit could give support for the pound as it may improve demand for UK assets

The UK’s trade deficit widened in April as both imports and exports were affected by the recent volcanic ash eruption which grounded flights in and out of the UK for 6 days. The trade deficit in goods and services was £3.3bn in April which was an increase on the previous month’s revised figure of £3.2bn. The goods deficit also rose from £7.26bn to £7.28bn with exports falling 0.6% and imports falling 0.4%. Obviously these figures have not been read too much into by investors as sterling made gains throughout the day.

Elsewhere the euro managed to make up some gains against the dollar moving away from its recent four year low as it reached a session high of 1.2072 up from the day’s low of 1.1924. This gave the pound some support against the dollar but did little to extend any further gains against the euro. Concern that the euro zone debt crisis will have an impact against growth meant the euro continued to be the weakest currency.

There are some significant data releases across the world today most notably we have the Bank of England interest rate decision with many economists believing it will be held at the current level of 0.5%. In the US we will see trade balance and jobless data. Finally in the euro zone Germany will release consumer price index with the European monetary union giving their interest rate decision which will be followed by Trichets speech.

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 to avoid the offshore casino.