QROPS update 6th February 2013 Pension drawdown and QROPS & 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).

UK

UK Services PMI for January was released yesterday and a revealed a much better-than-expected reading of 51.5, the markets had only been expected a slight improvement on a poor December reading of 48.9.

Sterling rose 50 points against the US dollar in around the release and tested the 1.58 mark, temporarily hitting a high of 1.5804. However during the course of the session the pound failed to hold on to these gains and GBPUSD slipped back to a low of 1.5628 as the London markets closed.

GBPEUR performed in a similar manner starting the session on the front foot in the late 1.16’s, however emerging signs of stabilisation in the Eurozone prompted the markets resume business as usual and the pound fell sharply to a low of 1.1507.

The National Institute of Economic and Social Research warned of a protracted recovery in the UK. This may result in sterling continuing to consolidate ahead of the Bank of England monetary policy meeting tomorrow.

Overnight has seen the pound claw back some of yesterday’s losses, GBPEUR has traded as high as 1.1580 and GBPUSD currently sits around 1.5650.

WORLDWIDE

EURUSD continued the declines seen on Monday to trade as low as 1.3459 on Tuesday morning having been as high as 1.3700 on Friday evening. An improvement in Spanish PMI’s and positive revisions to the German and composite figure stemmed the losses and EURUSD rose to 1.3590.

Traders will look to the ECB press conference tomorrow and are divided on the potential tone of Mario Draghi’s speech and whether it will defend the Eurozone’s recovery position or point towards policy easing as 2013 continues.

EURUSD currently trades at 1.3523 and is expected to remain range bound during today’s session. Support lies at 1.3493 whilst resistance is at 1.3615

French President Hollande spoke before the European Parliament yesterday. Seemingly referring to UK PM Cameron’s recent call for negotiations over the EU treaty, he warned about national interests taking precedence over Europe. He said a new accord must not weaken the economy.

US ISM Non-Manufacturing fell to 55.2% last month from 55.7% in December. Economists surveyed by MarketWatch had expected the index to slip to 55.0%. Reading over 50% indicates that more companies are expanding instead of shrinking.

In Switzerland, the trade balance fell to 1 billion Francs in December, but the release had no significant effect on Franc trading. GBPCHF posted a low of 1.4263 and a high of 1.4365

Bank of Japan Governor Shirakawa announced today that he will step down from his position on March 19 along with the two BoJ deputies, who were previously scheduled to finish their term on that date. The resignation comes a bit earlier than his scheduled April 8 end of term. There are expectations for the government to replace Shirakawa with a more dovish governor, who might be willing to step up stimulus to reach the 2% inflation goal faster. The announcement sent USD/JPY back above 93.00. GBPJPY traded between lows of 144.86 and a high of 147.26

Australian Retail Sales in December and fourth quarter came in well below expectations. The figures suggest that consumer confidence was weak in December and consumers were reluctant to spend. According to the latest RBA’s monetary policy decision, government officials hinted that further easing policy to support demand is possible. GBPAUD this morning is trading at 1.5155.

INTERBANK RATES (09.00 GMT)

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.

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