QROPS 11th October 2011 pension drawdown, flexible pensions QROPS and QNUPS

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).

There was a quiet day on the data front yesterday with analysts stating a lack of UK data meant the

markets were mainly driven by movements in risk appetite.

Sterling fell against a broadly stronger euro after French and German leaders promised to put a firm

plan in place to recapitalise Europe’s banks. German Chancellor Angela Merkel and French President

Nicolas Sarkozy offered no details of their plans but they pledged to do what was necessary to

support the banks, settle the Greek debt crisis and help growth within the euro zone, which resulted

in an increase to risk sentiment within the markets.

The pound fell from the early morning high of €1.1607 against the euro to end the session trading

near the low of €1.1453, a fall of over 1.4%.

Sterling performed better against a struggling dollar as it moved from the low of $1.5544 to end the

session trading near the high of $1.5683. This was mainly due to an advance in global stocks which

reduced demand for the greenback as a safe haven.

Sterling has recovered from the lows seen last Thursday after the Bank of England increased their

asset buying programme by £75 billion pounds a move which initially was seen as sterling negative

but now has been seen as a positive to stimulate the UK’s economy.

"Normally more QE would be negative for a currency, but given most of the major central banks are

contemplating more easing themselves, it's not weighing on the pound as much this time around,"

said Derks.

"The market is coming back to the view that a country taking affirmative steps to resolve its

problems is supportive for a currency," said the head of dealing for corporate and

institutional treasury at Investec.

IN THE UK

• Sterling fell sharply against a broadly stronger euro falling over 1.4% to end the session at a low of €1.1452.
• The pound gains against the dollar as investors move away from safe haven currencies and return to riskier assets reaching a session high of $1.5688.
• Analysts state that a lack of UK data meant the pounds moves were largely driven by swings in risk appetite.
• The negative sentiment towards the BoE’s shock increase to QE last Thursday is wearing off and is now seen as a positive to the pound.
• Bank of England policy member Martin Weale states on Sunday that there is still room for more QE, as Britain’s economy struggles in the face of fiscal austerity and the deepening on the euro zones debt crisis.

ELSEWHERE

• The euro performs well as Sarkosy and Merkel’s plans are digested, between them Germany and France promise to put a plan in place to recapitalise Europe’s banks, settle the Greek debt crisis and help growth in Europe.
• The details of this plan will not be released until the end of October.
• The euro rose by the largest daily gains in more than a year against the dollar moving from the low of 1.3392 to trade at the high of 1.3698 a movement of over 2.4%.
• France breathes a sigh of relief as Moody’s and S&P confirmed their AAA rating with stable outlook.
• Slovakia is the last member state of the EU left to vote on of the EFSF, their government meet today, most expects expect them to follow suit and vote for an approval of the new terms.
• UK media this morning report that Spain is unlikely to meet its deficit target, the Spanish economy is far too big to simply bailout and if this prediction is correct it will provide another much larger headache for European Finance Officials.
• Greek Finance Minister says Greek haircut more likely to be around 60% rather than the previously agreed level of 21% in July

DATA TO LOOK OUT FOR (all times UK BST)

• This morning UK Manufacturing Production figures are released expectations are to see an increase of 0.1% MoM the same rise seen in July.
• UK Industrial Production is also expected to increase to 0.4% MoM following Julys 0.2% fall, which could support the pound.
• In the US they release the budget balance data this evening at 7pm which is expected the see the US fed budget deficit move to $1.294trn for the 2011 fiscal year.

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.

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