QROPS update 3rd December 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).
Yesterdays’ trading was very volatile with the day gearing up for the Trichet’s speech and reports from the ECB.
The euro reacted strongly in what was a difficult day in the currency markets. This followed on from solid gains on Wednesday where it was announced the European Financial Stability Facility- the euro zone bailout fund would be receiving backing from the US. The single currency was boosted by reports the ECB was buying euro zone bonds after its president Jean-Claude Trichet disappointed investors by not announcing an aggressive bond-buying program.
However this may seem to be a short term gain as there is still mounting pressure surrounding the 16 member nation as to the full extent of the debt crisis within its peripheral zones. The aftermath of Trichet’s speech saw the euro weaken to €1.1860 against sterling, unusual as Trichet is usually positive in terms of the single currency. Reports were later issued however that the ECB had been buying up bonds in Portugal and Ireland which saw the euro rise. This process was expected but not at the rate anticipated; instead the markets deemed this bond buying as too soft. The euro finished the days trading at 0.8% up on sterling and 0.7% up on the dollar.
Sterling continued to struggle in the markets even with PMI figures coming out stronger than expected at 51.8 compared to the suggested 51.3, usually if this figure is above 50 we see a bullish reaction from sterling.
However with this stronger than expected results from sterling the focus was still heavily on the ECB announcements, with sterling dropping before the announcements whilst investors waited to see if policymakers would take any measures to help alleviate debt problems in some euro zone countries. Sterling remained quite flat against the dollar and kept trading above its 200 moving average of $1.5350 and finished the day 0.1% down against the dollar, not bad considering the volatility of the days trading.
Today the focus firmly switches to the US as we wait to see what will happen with non-farm payrolls and unemployment rates, both of these reports have the ability to move the markets. Non-farm payrolls is expected to come out lower than previous rates which suggests a slowing economy and would weaken the dollar.
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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