QROPS update 14th December 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).

Sterling started the day yesterday under heavy selling pressure following some poor housing data. The Rightmove data showed that house prices in England and Wales fell 3% in the last month, the fall was blamed on continuing economic uncertainty and low mortgage approvals. With RICS housing data following the Rightmove survey into the market, (released last night) a repeat could mean further downward pressure exerted on sterling.

Following the pressure of the housing data yesterday morning, Bank of England deputy governor, Charles Bean, was quoted as saying that further struggles in the euro zone affecting the UK or a notable slowdown in UK growth could result in further monetary easing. Although fairly obvious and also stated more than a few times previously this compounded a very poor start to the week for the pound and left sterling down across the board.

The respite for sterling came later in the day when Moody’s credit rating agency flagged concerns about the US credit rating. Moody’s warned that it could move closer to downgrading the US’s triple A credit rating. This news brought an about turn in GBP/USD and a sharp selloff in the US dollar and led to sterling making a significant gain by the close of UK trading.

Sterling finished the day yesterday trading up 0.4% against the dollar at around $1.5850 having finished the morning session 0.3% down.

Against the euro, sterling didn’t do so well, having been as high as €1.1965 during weekend trading sterling started to gently slide before the UK markets had even opened and with the housing market and Bank of England comments, sterling closed the day trading around €1.1840 down nearly 1% on the day.

As expected following the Moody’s news EUR/USD was weighted heavily in the favour of the euro with the euro 1% higher on the day at €1.3390.

A busy week lay ahead for sterling with inflation, labour market figures and retail sales all due. Recently we have seen a mixed bag of data with high inflation and a pickup in manufacturing. Expect trading to be choppy and markets to remain volatile if we see a continuation of this.

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.

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