QROPS 27th September 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).

Sterling managed to make gains across the board yesterday most notably against the euro and dollar as there was a slight improvement in risk appetite with investors.

The pound reached a session high of €1.1557 up from the low of €1.1445 achieved in early trade.

Against the dollar sterling reached a high of $1.5554 from the low of $1.5431.

The pound strengthened for the 2nd day in a row against a weaker euro as concern mounts that the European policy makers will fail to agree to a resolution to the areas debt crisis. There was also talk the European Central Bank may need to cut rates to help the struggling euro zone economy.

Traders also said the pound was aided by talk of a UK clearer needing to convert dollars into sterling as part of its quarterly dividend payment.

Sterling dipped briefly in the morning after Bank of England policy maker Ben Broadbent said the UK currency was likely to remain weak for some time and that a weak global economy would put downward pressure on UK inflation. He also stated that inflation expectations remain under control and that Quantitative easing may help the banking system by boosting nominal growth.

Despite sterling gains on Monday it must be noted that the pound may remain vulnerable to selling against the dollar on on-going concerns over the fragile UK economy which may lead to further monetary easing.

"Anything related to the risk of more QE in the UK will be zeroed-in on by the markets," said a currency strategist at CIBC.

"Sterling/euro could see a bounce down towards €1.1428 if we see continued dovishness from the MPC," said a currency strategist at Westpac.

Adding that sterling was likely to be side-lined until further negative news emerged out of the UK

as markets focus on the euro zone and on European leaders' proposals to shore up the bloc's EFSF bailout fund.

IN THE UK

• Sterling makes gains across the board yesterday after there is an improvement in risk appetite with investors.
• The pound reaches a session high of €1.1557 against the euro and $1.5554 against the dollar.
• Despite sterling’s gains on Monday the pound remains vulnerable to selling versus the dollar over concerns that a weak UK economy could prompt the BoE to resort to further monetary easing.
• Bank of England policy member Ben Broadbent states the UK currency could be weak for some time because of a weak global economy, continuing that further quantitative easing may help the banking system by boosting nominal growth. This helps rumours continue for a Nov 10^th rise in QE.

ELSEWHERE

• A slight return to risk as European Finance Ministers begin to finally appreciate the severity of the task ahead causes USD to weaken cross the board and send Asian equities up 3% this morning.
• A 50% Greek default is looking the most likely outcome under a general plan to reduce the budget deficit of periphery nations.
• Greek finance ministers outline latest austerity measures today as speculation continues as to whether or not they will receive the nest tranche of bailout fund.   
• Expectations are that the SPV would be able to buy bonds and use the proceeds to buy European sovereign debt, without the ECB needing to expand its balance sheet.
• One of the biggest concerns facing the increased €2 trillion limit on the European Financial Stability Fund is German public opposition, they are fed up of having to carry the debt of neighbouring nations whose government’s policy have caused them to wind up in this situation.  
• Talk continues of a interest rate cut at the next ECB meeting on October 6th, will it be 25 or 50bps
• This morning German consumer confidence rises to 5.2 against the expected figure of 5.1.

DATA TO LOOK OUT FOR (all times UK BST)

• 11.00 CBI Distributive Trades Survey is released, the figure is expected to match last month’s disappointing -14% as conditions in the UK retail and wholesale sectors remain tough
• US Consumer Confidence is released at 3.00pm and the markets are hoping for a rise following the recent statements from the Fed and President Obama outlining plans to increase growth and reduce debt
• Fed member Lockhart addresses a press conference at 5.30pm  

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.

This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.