QROPS update 21st June 2011 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 managed to make some gains against the dollar yesterday, tracking a bounce in the

euro/dollar after comments made by Eurogroup chairman Jean-Claude Junker calmed

immediate fears about stability in the euro zone.

Eurogroup chairman Jean-Claude Juncker said the European Stability Mechanism will not

have preferred creditor status, removing a potential reluctance among investors to lend to

countries such as Ireland and Portugal which could make it easier for them to re-enter the

markets.

The pound reached a session high of $1.6234 against the dollar up from the earlier low of

$1.6108 as investors recovered from concerns that Eurozone finance ministers had decided

to hold off agreeing to a new flurry of emergency loans to Greece.

The euro made gains against majority of its trading pairs yesterday after the comments

made by Jucker reassured investors that a Greek default on its debts can be avoided. This

helped the euro erase some of its recent losses as it eased concern about a spreading

regional debt crisis.

Against the euro the pound fell from the days high of €1.1375 to end the session trading

near the low of €1.1311.

The pound has come under pressure over recent weeks due to a run of poor economic data

which points to slow growth, investors will be watching net public sector borrowing figures

which are released today which are widely expected to add to the gloom over the UK’s

budget deficit.

Investors will also scrutinise the Bank of England's Monetary Policy Committee meeting minutes for

June, released on Wednesday, for clues on how new policymaker Ben Broadbent voted in his

first meeting since replacing arch-hawk Andrew Sentence

IN THE UK

• Sterling makes gains against the dollar reaching a session high of $1.6234.
• Quiet day on data yesterday for the UK with no relevant releases.
• A resurgent euro pushes the pound down to €1.1311 from a high of €1.1375 as debt worries unwind slightly.
• UK PM David Cameron says he will fight off any attempt to use British money to bail out Greece.

ELSEWHERE

• Eurogroup chairman Jean-Claude Juncker said the European Stability Mechanism will not have preferred creditor status, removing a potential reluctance among investors to lend to countries such as Ireland and Portugal which could make it easier for them to re-enter the markets.
• The euro gains against majority of its trading pairs as Junkers’ comments reassured investors that a Greek debt default can be avoided.
• This morning China have stated they will be ‘willing to help European countries realise economic growth in a stable manner’
• Eurogroup at last agree the increase of EFSF to €440 billion.
• In Australia the RBA minutes reveal that there will have to be more monetary tightening in the near future, this translates to a rise in interest rates and will help to support the already strong Aussie dollar. It was deemed sensible to leave rates as they are this month because of concerns of global economic conditions and lower asset prices.
• Fitch have said they will put US on negative watch unless they raise debt ceiling limit by August 2

DATA TO LOOK OUT FOR

• UK Public Sector Net Borrowing is released at 9.30am, consensus is for the borrowing figure to rise to £16.3bn
• Both the German and Eurozone ZEW surveys are released at 10.00 and are expected to show that conditions have deteriorated and the outlook is worse than it was last month.
• At 1.30pm Canadian Retail Sales are released, a rise to 0.4% is expected.
• US Existing Home Sale data is released at 3.00pm

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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