QROPS update 22nd August 2011 Pension income drawdown & 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).

Sterling hit a 3-1/2 month high against the dollar on Friday, putting it on track for its best

weekly performance since mid-January, as investors wary about funding problems in the

euro zone and a recession in the U.S. preferred to buy the pound.

In an environment where investors are increasingly wary about sovereign debt risks, the

pound drew some support from data which showed Britain's public finances posting an

overall surplus in July, pushing down overall borrowing this fiscal year and bringing the

government closer to its fiscal targets.

"Given the focus on the euro zone's sovereign debt problems and slowing growth in the

U.S., the focus is off the UK for now," said a currency strategist at Westpac.

"Sterling has outperformed recently, particularly against high-beta currencies like the

Australian dollar, not because the UK is doing particularly well but because it's not doing

particularly badly."

Mounting fears of a global recession and concerns about rising funding stress facing

some large European banks saw global stocks extend a slide. European bank shares fell

sharply and these concerns have weighed down on riskier currencies like the Australian

dollar.

"Given the renewed demand for safe-haven currencies, sterling has fared quite well,"

said FXPro. "Sterling is the least bad of the big currencies but economically the country is still completely stuck in neutral."

Analysts expect sterling to gain against the cyclically sensitive currencies like the euro,

but could underperform funding currencies like the yen and Swiss franc as worries about

a deep global slowdown take a foothold.

"The sharp on-going sell-off in UK bank equity prices will also reinforce tight bank lending

restraining further domestic demand growth," Bank of Tokyo Mitsubishi said in a note.

"With the government steadfastly committed to fiscal consolidation, the Bank of England may soon

have to respond to intensifying pressure to resume QE to support growth. However with

the pound already extremely cheap, further downside may prove relatively limited."

Markets expect the Bank of England to keep interest rates on hold until the end of 2012,

with more speculation rising it could opt for further quantitative easing to stimulate

growth.

IN THE UK

• Sterling hits a 3-1/2 month high against the dollar on Friday of $1.6618 as investors wary about funding problems in the euro zone and a recession in the U.S. preferred the pound.
• The pound was on track to make its best weekly performance gains against the dollar since mid-January.
• Sterling is currently seen as the currency of choice as it continues to plateau whilst other major economies continue to underperform.

ELSEWHERE

• Global stock markets continued to slide following mounting fears of a global double dip recession.
• 4 years after the problems started the global problems are still continuing with no end in sight.
• Germany PPI up to 5.8 against consensus of 5.3
• Investors show confidence in Trichet that he will have the ability to prop up the currency until government officials reach a long term agreement to reduce the areas budget deficit.
• The Yen and Swiss franc weaken over speculation policy members in both countries will seek to curb gains in their currencies.

DATA TO LOOK OUT FOR 

There are no major economic data releases due out today.

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.