QROPS update. 21th September 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).

Poor economic data saw to it that the pound fell to a seven week low against the Euro yesterday. News emerged from the Bank of England that lending to U.K. businesses fell for the fifth month in July, although at its’ slowest pace for a year. In addition to this negative statement, the Bank of England said that M4 broad money supply fell by 0.2% in August. More bad news was to come from the housing sector and added to the question surrounding the strength of the economic recovery in the UK. According to Rightmove, property prices in England and Wales fell in September and with this being the third consecutive negative movement, all gains that were achieved in the first half of the year have been wiped out.

GBP was unable to gain momentum when, early in the trading day, markets saw an Asian sovereign fund buying the dollar and Moody’s remarks that they expected the UK’s AAA rating to remain firmly in place. (The reason behind their optimism coming from the Government’s swift commitment to reversing economic woes.)

With the U.S. Federal Reserve meeting being held today the USD traded in tight ranges. Many see it as highly likely that the Fed will highlight the importance of injecting more stimuli to support a recovery.

“Any signs of more quantitative easing could support demand for dollar funded carry trades and help the pound,” said markets strategist at Lloyds TSB.

According to investors, the gains that a weak USD would provide to the pound would be short-lived as the full effect of the UK Governments spending cuts still remain to be seen.

The Euro posted gains of 0.5% vs. GBP and USD as it battled against the rumours that Ireland had approached the IMF for financial assistance.

Ireland’s cost of borrowing has reached its highest level since the introduction of the Euro and investors reacted by selling off government bonds. The interest rates on Irish 10-year bonds rose above 6.38% nudging past the previous high set only three days previously.

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.