Currency Exchange

Currency exchange continues to concern many expats with UK Pensions and QROPS. The complexity for Pension and QROPS and investment strategies also needs continued monitoring of exchange rates to optimise returns.

Continuing our daily look at factors affecting currencies allows some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.

The UK’s trade deficit widening more than expected resulted in sterling falling most noticeably against the dollar which hit a day’s low of $1.4675 against the earlier days high of $1.4915 and pushing through the technical barrier level of $1.47. Britain’s goods trade deficit with the rest of the world widened to £7.5bn in March from February’s figure of £6.3bn, this was due to exports which held steady at £21.4bn but imports rose to £28.9bn up from £27.5bn.

Markets are driven over the recent weakness in the euro against the dollar which remains near the 14 month low it recently hit, this is due to growing concerns of the effectiveness of a $1 trillion package to prevent the spread of the recent debt crisis in Greece, this has sped up sterling’s decline over recent days as risk appetite has left the markets. Yet the pound held steady against the euro which hit a days high of €1.1764 eventually trading around the €1.1670 mark.

Sterling seemed to be recovering on Tuesday from the one year lows after the new coalition government was formed between the conservatives and the liberal democrat parties which started to clear the recent run of uncertainty as to who would lead the country in parliament. With pledges to focus on the UK’s current fiscal deficit which would include spending cuts as top priority all eyes will now be on how they expect to reduce this as the details disclosed are still vague at the moment.

The pound rose to 79.5 on the Bank of England’s trade weighted index up from the previous day.

House prices in the UK continued to rise year on year in April with figures coming in at 9.7% up from the previous figure of 7.3%. This was followed by an increase in consumer confidence in April which only managed to recover a fraction of the previous months drop after continued worries over the impending fiscal tightening which seems to of reduced household’s optimism about the next 6 months.

Elsewhere jobless claims in the US were released with the figure coming in at 444k down from the previous figure of 448k showing less Americans were claiming unemployment.

This helped the dollar to extend further gains against the euro which ended up falling to as low as $1.2540.

Data released today includes in the US retail sales, consumer sentiment and industrial production.

Gerard Associates Ltd advises expats and people considering living abroad on the options available for Pensions, QROPS and investments in a clear format allowing all customers to make an informed choice. This with the reassurance and security of UK authorised and regulated advice.