Pound and Euro Continues to Slide while Sterling is on Boost
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).
Sterling rallied against the euro yesterday as investors looked beyond the Irish bail out to the possibility of further euro zone nations also requiring help. On-going concerns about whether more euro zone nations such as Spain and Portugal will require bailouts is likely to continue to affect the price of the euro until markets are satisfied that the matter has been put to bed one way or the other.
The euro weakness was not replicated against the US dollar and we saw a completely different story as the pound tumbled to a two month low off the back of news that the UK cut its growth forecast for 2011 and nudged up its expectations for public sector borrowing in the mid-term.
"Sterling is getting dragged around by sentiment in the euro zone. While it is modestly outperforming the euro, it's taking a hit against the dollar," said currency strategist at ING.
He added that the latest selling in higher-risk assets would provide a good chance for investors to book profits on dollar-funded positions ahead of the year end, which would keep the dollar in demand, while possibly dogging sterling for now.
On top of this sterling's gains are likely to be limited due to the stalling of any significant return to form of UK data, the data out of the UK has been inconsistent at best and mostly limited to snippets of good data amongst a mixed bag rather than the steady flow of good data that the markets are looking for. This was followed up yesterday with the Office for Budget Responsibility raising its growth forecast to 1.8% from 1.2% that it forecast in June, but it cut its 2011 forecast from 2.1% from 2.3%.
The UK housing market was also dealt another blow yesterday with data that showed the number of British mortgage approvals fell to its lowest in 8 months in October and separate data also showed that houses fell in price.
At the close of play yesterday sterling was up around 1% on the day against the euro trading at 1.1870, against the US dollar sterling was down around a cent on the day closing the day at $1.5545.
The euro remained under pressure from USD with the greenback making significant gains throughout the day (EUR/USD) and closing around 1.31 having begun the day over 1.33.
If risk aversion continues to be the key theme moving forward expect the US dollar to benefit off the back of it with the euro being the biggest loser with more potential euro zone bad news to come.
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.
This with the reassurance and security of UK FSA authorised and regulated advice - essential for your security.
Questions and Answers
If you want to retire overseas from the UK, QROPS helps you transfer your UK pension overseas. However, how do you choose a reliable QROPS provider in that country?
Her Majesty's Revenue and Custom or HMRC has introduced a useful scheme known as QROPS.
The QROPS pension scheme transfer process is risk free and it can be transferred easily to a country having QROPS facility which is approved by HM revenue and customs.
HMRC monitors QROPS transfers through many legislations and it has a set of rules like the HMRC 6. The QROPS provider takes on the responsibility to provide some information to HMRC that gets the approval of the transfer of funds.
To qualify for all the advantages of a QROPS transfer, one must actually be a non-resident of UK for a minimum of five consecutive UK tax years. A large number of HMRC QROPS are not open to US citizens; however, people of other nationalities can freely apply.
All those people associated with the international fund transfer must be well-aware of QROPS. The Qualifying Recognized Overseas Pension Schemes, usually known as QROPS, is a pension fund transferring plan that allows transferring UK pension to overseas countries.
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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).
Data on Wednesday showed UK industrial order expectations had fallen more than expected in July. In a report by the Confederation of British Industry, industrial order expectations declined to - 10.0 in July, compared to a 1.0 reading back in June. Analysts had expected a decline in July to - 3.0 in July. A reading above 0.0 indicates increasing order volume is expected, whilst below indicates expectations are for lower volume.
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).
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