QROPS update. 13th September 2010 Pension Foreign exchange 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 or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, 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 , QROPS and now QNUPS (Qualifying non UK Pension schemes).
The recent run of weak UK data continued on Friday after producer price index input Month on month was down to -0.5% against expectations of 0.1%. Year on year the figure was down to 8.1% against the previous release of 10.8% this data measures the rate of inflation experienced by UK manufactures when buying goods and services. PPI output which measures any price changes of goods produced by UK manufacturers did not fair any better with both MoM and YoY figures coming in lower then previous releases. It showed inflation slowed to a 6 month low in August. This data came a day after UK’s goods trade deficit unexpectedly expanded to a record £8.667 billion in July from £7.532 billion in June.
"The Bank of England will probably be pretty happy with the August producer price data and the figures reinforce belief that the Monetary Policy Committee
will hold off from raising interest rates for some considerable time to come,"
It highlights concern that the growth shown in Q2 will not continue into Q3 especially with the pending budget cuts which will be detailed by George
Osborne in Octobers spending review which also includes an additional extra £4 billion of welfare cuts on top of the already announced plans to cut the annual bill by £11 billion and how this will effect the UK’s economic recovery.
Osborne said he would detail the exact cuts in October's spending review, which will also explain how the government plans to implement previously
announced 25% cuts in many government departments' budgets.
Sterling hit a 6 week low of $1.5296 against the dollar on Tuesday before recovering slightly but with many traders believing the buying on the pound was short term the outlook for sterling continues to look fragile and with market players recommending selling into rallies in the currency.
On Friday sterling hit a session high of $1.5465 but ended the day trading around the low of $1.5367. Against the euro the pound started the day trading
at €1.2171 but again was down by the end of the day’s session to the low of €1.2117.
Market concern about Europe's banking sector has resurfaced this week.
"European banking woes and increased scrutiny on the UK's fiscal situation should mean a close fought battle in EUR/GBP," said a London-based spot
trader. "But I expect sterling on price action to be the weaker of the two."
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 Pension including QROPS and QNUPS and investments in a clear format allowing all customers to make an informed choice.
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