QROPS update. 4th October 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).
Speculation the Bank of England will increase their asset buying programme at their next planned meeting this week meant sterling continued to feel the pressure on Friday. The pound made some gains against a weaker dollar but hit a four month low against the euro.
Manufacturing data in the UK weakened more than what was initially expected in September growing at its slowest pace in 10 months, the figure came in at 53.4 against the previous release of 53.7, this was mainly due to export orders falling for the first time in a year below the 50 no-change mark which shows demand contracted over the month. It continues on from the recent theme that the economy in Q3 is not growing at the rate it did in Q2 thus highlighting comments made by BoE policy member Adam Posen that the UK will need to add extra stimulus in form of quantitative easing.
Many analysts are stating that sterling is being driven mostly by movements in the dollar, which remains under broad selling pressure against majority of its trading pairs as it has come to light the FED will need to pump further cash into the already struggling economy.
"Sterling is caught up in general dollar weakness, but the euro is tending to outperform, so euro/sterling will go higher," said global markets advisers at Informa Global Markets.
Elsewhere the euro continued to outperform many other currencies as it seems to be benefiting from risk appetite within the markets; this was even after German retail sales for MoM where down to -0.2% against expectations of 0.5%. YoY the figure was better coming in at 2.2% against the previous release of 1.2%. German PMI followed which showed a fall to 55.1 from 55.3. The euro zone also saw an increase to unemployment which rose to 10.1% against 10%
On Thursday traders said many investors were caught short of euro/sterling on anticipation that an annual EU rebate to the UK would result in large outflows of euros into sterling. The fact the euro did not fall as much as expected prompted a wave of short covering that lifted the single currency.
In the US core and personal consumption expenditure figures all came in as expected and showed no change from previous releases. The consumer sentiment index rose to 68.2 from 67.1. Construction spending for August rose to 0.4% against the last release of -1.4% but Manufacturing fell to 54.4 from 56.3.
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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