QROPS update 17th December 2012 Pension drawdown and QROPS & 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).

UK

GBPEUR opened on Friday at 1.2322 climbing to a high of 1.2337 but later gave up these gains and dipped under 1.23 to break through support at 1.2298 on its way to a session low of 1.2264 after a UK credit rating downgrade by S&P was priced into the market.

The UK construction sector improved significantly in October, offering a glimmer of hope that the economy could grow in the final quarter of the year. Construction output climbed by 8.3% in October – compared with a drop of 2.8% in September.

GBPUSD rose as investors took profits after the Federal Reserve expanded their QE programme and attention switched back to US fiscal problems, the pair opened at 1.6114, climbing as high as 1.6175 as the European markets closed.

The momentum has continued over the weekend and GBPUSD has hit a high of 1.6190 this morning falling just short of resistance at 1.6194.

GBPEUR has opened this morning trading either side of the 1.23 level, initial support will be at Friday’s low 1.2264, and resistance on the upside will be at 1.2326.

WORLDWIDE

EURUSD climbed to a high of 1.3140 after US data pointed to muted inflation pressures, boosting expectations the Federal Reserve will stay on its ultra-easy monetary policy path. It has peaked at 1.3181 this morning. The next key level to breach is resistance at 1.3201.

France will push to harmonize tax systems within the European Union, according to Francois Hollande, as actor Gerard Depardieu joined the increasing flow of wealthy taxpayers leaving France to escape high tax rates.

Angela Merkel, speaking during a news conference at the end of a two-day summit of European Union leaders warned against premature optimism that the Eurozone debt crisis has been tamed and urged leaders to stay the course on economic and fiscal policy reforms, citing weakening economic data showing that the euro zone has again dipped into recession and joblessness is rising.

President Barack Obama and House of Representatives Speaker John Boehner held a "frank" meeting to try to break an impasse in negotiations over the "fiscal cliff". However The White House said yesterday it would not accept an offer from the Republicans to hike taxes on the richest in exchange for spending cuts.

US Treasury prices extended gains, pushing yields lower, aided by a report on US inflation that shows decreased risk on that front. Yields on 10-year notes , which move inversely to prices, fell 2 basis points to 1.72%. They touched 1.75% during the Asian session, which may limit the decline by drawing in buyers.

The yen weakened after Shinzo Abe was re-elected in Japan as markets anticipate aggressive fiscal and monetary stimulus, although the currency may now consolidate ahead of the Bank of Japan meeting later this week. The US dollar swiftly reached 84.48 yen early in the session, its highest since April 2011.

Canadian factory sales fell much more than expected in October, and the most in nine months, as production in the volatile aerospace industry slumped and sales in the motor vehicle and primary metals industries declined.

India's inflation slowed to its weakest pace in 10 months in November, but it is unlikely to be enough to get the central bank to cut interest rates at its policy review meeting next week. However, with inflation now easing for the second consecutive month, it does raise the hope that the Reserve Bank of India may start easing monetary policy gradually in January.

INTERBANK RATES (09.00 GMT)

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.

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