QROPS update 25th November 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).
The euro zone debt crisis largely overshadowed any economic data releases, on a day that saw the single currency continue to slide and government bonds show signs of intense stress. Despite figures out of Germany that showed business sentiment is stronger than ever, (an increase to 109.3 in November from a revised 107.7 in October) and efforts by European politicians to place a positive spin on recent events, investors chose to follow their nerves within the marketplace. Overnight the ratings agency Standard & Poor’s reduced its credit rating for Ireland to A from AA-, citing concerns over the scale of the country’s bank bailouts. The announcement was far from positive, but the lack of immediate reaction from the currency markets outlined a far more serious overview. Sentiment revealing concerns over the whole structure of the euro, rather than over any of its individual member states, has begun to arise within the market.
“People are wondering what the end game is here, and investors see no last-mover advantage…they want to get out now,” said a senior currencies analyst at The Bank of New York Mellon, in London. “It’s just theoretical now, but it’s not impossible that one of the euro members might leave.”
At one stage the euro dropped to $1.3309 against the US dollar, which has not been seen since September. The only source from which the single currency could draw a positive movement was data released from the United States. Orders for durable goods in the US took the biggest drop in nearly two years during October (a decrease of 3.3% to a seasonally adjusted $196.05 billion). Further poor data came in the form of a fall in new home sales in October and a drop in the Housing Price Index for the month of September. The Greenback was helped however by a fall in jobless claims from a previous figure of 432,000 to 418,000 and a surprise rise from 69.3 to 71.6 in the Michigan Consumer Sentiment Index for November.
Sterling not only capitalised on the woes from Europe, but enjoyed a boost of its own from official data releases. Britain’s economy grew 0.8% in the third quarter of this year, boosted by net trade which made its biggest contribution to growth in two years. (Compared to the same period of 2009, the economy expanded by 2.8%, unchanged from a preliminary reading). Analysts had said that the pound would have been vulnerable had the figures been revised down. The initial reading was twice as much as had been expected and had contributed to a pullback in expectations for more monetary easing.
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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