QROPS update 15th February 2012 & Pension Drawdown & 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).

IN THE UK

• GBP was stable against EUR and USD yesterday shrugging off warnings by Moody’s. GBP/EUR saw a high of 1.1957 and did not dip below 1.1930 in overnight trading.
• The pound rallied 1.5734 during yesterday’s trading from a 1.5674 open against USD; although the US posted better than expected ‘Core’ Retails Sales, the pound was helped by poor non-core Retail Sales, posted at only 0.4% as opposed to the 0.8% expectation.
• This morning despite the unemployed claimant count rising by 6900, the rate of unemployment remained on par with last month’s 5.0%. There were some rumours this morning that the rate would rise suddenly, as these didn’t materialise the pound has remained unscathed.

ELSEWHERE

• 12 EU member states including Italy, Spain, UK and France, are vulnerable to further shocks due to significant economic imbalances.  This is the view of the EU Commission.  High levels of private and public debt, persistent current account deficits and house market bubbles mean tighter surveillance is needed for at risk countries.  States receiving financial aid were excluded from the list.
• Euro rose to 103.48, highest level against JPY since December, after China indicated it is prepared to assist in the resolution of the Eurozone debt crisis.
• JPY dropped against all its major peers, apart from the euro, after new easing steps from the BoJ indicated the central bank will take steps to protect the economy from currency strength.  GBP/JPY increased to 123.36 and USD/JPY rests at 78.44.
• German full year GDP figures show growth of 3%, despite a negative 0.2% contraction on the seasonally adjusted Q4 GDP figures.
• French preliminary GDP figures showed a pickup in the fourth quarter, with growth of 0.2% rather than the expected negative .2% contraction.  On live release of this data the euro stayed at 1.3171 on the dollar.
• Italy is expected to post a contraction of 0.4% which would be the second straight quarter of decline, and an official recession.
• French PM Francois Fillon argues that constitutionally a referendum is needed for France to implement it’s commitments under the new EU treaty.  If France fail to deliver this would significantly undermine the fiscal unity demanded of the EU by funding institutions like the IMF.
• In Australia the leading employment indicator suggests claims fell for February bucking a 5 month increase. Personal finance rose to 0.4%, and auto sales increased to 1.3%.  On the markets this only materially impacted the USD which saw a fractional loss against Aussie.  EUR and GBP remain at their low levels of 1.22 and 1.46 respectively.

DATA TO LOOK OUT FOR (all times GMT)

• The market will scrutinise the Bank of England’s inflation report at 10.30 today. The report is a key indicator as to the BoE’s likelihood to increase stimulus later in the year.
• Sentiment for the FOMC in the US will give a clearer idea of the extent of pick up in the world’s largest economy, this may return risk appetite to the market.
• GDP figures for the Eurozone as a whole will be watched closely in the lead up to crucial discussions between EU finance ministers this evening. 

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.