QROPS update 7th November 2012 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

GBPEUR traded within a 55 point range yesterday hitting a one-month high of 1.2524 on the back of whether or not Greece's parliament will pass crucial austerity measures while the market awaited UK factory output data.

Shortly after the 9.30am data release, the pound dropped to a low of 1.2469 as disappointing UK industrial output data dampened prospects for a sustained economic recovery.

The weak figures will further complicate the Bank of England's monetary policy decision on Thursday, with contrary data in recent days leaving economists struggling to predict whether the central bank will embark on another round of asset purchases to boost the economy.

GBPUSD trading was fairly subdued as all eyes and investors wait for the US election results. The market hit a high of 1.5997 with the low within a 40 point range at 1.5963.

This morning GBPUSD has broken back through 1.6000 as the dollar was sold off overnight after the US election results. GBPEUR remains under 1.2500 with support seen and 1.2445 and the next resistance point at 1.2492.

WORLDWIDE

German manufacturing orders plunged in September as orders from within the eurozone declined by almost 10% from August, undermining growth expectations for Germany's economy.

French Prime Minister Jean-Marc Ayrault said on Tuesday, €20bn ($25.6bn) worth of tax breaks that will allow companies to cut labour costs, in a bid to restore the competitiveness of the country's rapidly declining industry. The shortfall in the government finances, worth about 1% of the country's gross domestic product, will be financed by an increase in value-added tax and by spending cuts in equal measure.

Currency markets remained in tight trading ranges on Tuesday market participants refrained from placing any big bets ahead of the US presidential election results. With early polling underway, the US dollar weakened against the commodity-linked currencies of Australia, New Zealand and Canada in European trading hours while strengthening against the pound and yen, but market moves were small. GBPZAR was the biggest mover of the day with close to 0.85% move. Session high of 13.99 from the low of 13.82.

Meanwhile, the euro see-sawed against the US dollar after Greece managed to sell €1.3bn euros of 26-week treasury bills. EURUSD peaked at 1.2819 but dropped off to a low of 1.2762.

The Australian dollar largely held onto the gains it made in Asian hours following the Reserve Bank of Australia's surprise decision to keep interest rates unchanged at 3.25%. GBPAUD touched 1.5411 with the low of 1.5299. The post-meeting statement was fairly neutral indicating the rate cut previously expected at the next meeting in December no longer looks like a done deal.

In emerging markets, the Turkish lira extended gains against the dollar a day after the country received its first investment grade rating in almost two decades. Turkey's Finance Minister Mehmet Simsek said Tuesday the upgrade could attract as much as $32bn in direct and portfolio investments.

President Obama won a second term following a nail-biter rally for the White House. The dollar fell against the euro in early Asian trading. The market traded at 1.2860 from a low of 1.2782. An Obama victory was seen among traders as a dollar-selling cue as it may suggest further easing measures by the US Federal Reserve, after the central bank ushered in a $40 billion monthly bond-buying programme to spur the world's biggest economy.

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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