QROPS Update 17th August 2011 Pension income drawdown, flexible pensions & 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 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).

Tuesday saw the euro fall across the board, as weak German and euro-zone growth data

sparked concerns about a potential slowdown, damping risk appetite and boosting demand

for the safe-haven Swiss franc, yen and dollar.

Data showed Germany’s gross domestic product (GDP) growth slowed to 0.1% in the

second quarter, which was way below forecasts of 0.5%. On release of this, the euro

was pushed down more than 1% against the Swiss franc.

The euro zone’s GDP data showed the region’s economy grew by just 0.2% over the

same period, adding to pessimism over the currency block, already struggling with a

sovereign debt crisis which is only escalating. These concerns are likely to make investors

rather wary of the euro in the coming days.

The leaders of France, President Nicolas Sarkozy and Germany, Chancellor Angela Merkel,

were under pressure to show financial markets they are in agreement on doing more to

shore up the embattled currency union, or risk watching the euro zone unravel.

They had previously planned to meet this week to push ahead on their July 21 pledge to

come up with new proposals on euro zone economic governance, but the stakes were raised

when France was slammed in last week’s global market rout.

In early New York trading, the euro was down 0.4% versus the dollar at $1,43830,

with support around the $1.43511 level.

The pound pared losses against the US dollar, easing off the daily low after stronger than

expected UK inflation data prompted Mervyn King, the Bank of England Governor, to say the

central bank could raise rates to bring down inflation.

The UK Office for National Statistics said earlier that the rate of consumer price inflation

accelerated to 4.4% in July from 4.2% in June, above expectations for a 4.3% increase.

Core CPI, which excludes food, energy, alcohol and tobacco costs increased by a seasonally

adjusted 3.1% in July, broadly in line with expectations and up from 2.8% in June.

Over in the United States, the number of building permits issued fell more than expected in

July, official data showed.

In a report, the US Census Bureau said the number of building permits issued in July fell

3.2% to a seasonally adjusted 0.60 million, down from 0.62 million in June. Analysts had

expected a decline of 1.9% to 0.61 million in July.

US Housing starts also fell 1.5% in July to hit a seasonally adjusted 0.60 million, broadly in

line with expectations.

IN THE UK

• UK Consumer Price Index accelerates to 4.4% in July, up from 4.2% in June and beats expectations for a 4.3% increase.
• Bank of England Governor, Mervyn King, hints at potential hike in rates to curb inflation and didn’t rule out further QE.
• GBP/EUR hits a low of 1.1331 and a high of 1.1411 and GBP/USD hits a low of 1.6322 and a high of 1.6430

ELSEWHERE

• Euro falls across the board on the back of weak German and Eurozone growth data, sparking concerns about a slowdown and damping risk appetite
• Germany’s GDP growth slows to 0.1 percent in the second quarter, less than a forecasted 0.5 percent.
• GDP data from the euro zone showed the region’s economy grew by a mere 0.2 percent over the same period (second quarter).
• US Housing starts fell 1.5% in July to hit a seasonally adjusted 0.60 million, in line with expectations
• US building permits fell more than expected in July, by 3.2% to an adjusted 0.60 million, down from 0.62 million in June. Forecasts were for a decline of 1.9 percent to 0.61 million.
• In Australia, minutes of the RBA’s meeting on the 2nd August, showed that policy makers extended a pause on interest rates due to global growth concerns.
• Chancellor Merkel and President Sarkozy call for ‘true economic governance’ after their meeting to help combat the spiraling debt in the Eurozone.

DATA TO LOOK OUT FOR 

• All eyes on the UK and Bank of England minutes, due out at 09.30am. Will there be more policy makers in favour of either a rate hike or further QE, after CPI figures yesterday showed an increase to 4.4%.
• Also out at this time, is the UK Jobless Claims Change. Have unemployment benefits jumped or will it show UK labour market is gaining strength??
• 10.00am we will be open to the Core CPI figure from the Euro zone, expected to come out at 2.5%, still above their target level of 2%
• Over in America, at 1330pm, we will see the release of the July Producer Price Index, an early indication of inflation, as this measures the changes in the selling prices, producers charge for goods and services.

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.