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 fell away from an eight and a half month high yesterday against the US dollar rebounding due to uncertainty regarding how the Federal Reserve currently stands with their continued monetary easing.
Ben Bernanke spoke first on Friday about the case for more easing and this led in to the US dollar falling against a host of currencies. This was later corrected when Bernanke ate some of his words and perhaps realising that he had scared the markets, was a little more reserved as he stated that they would need to proceed cautiously with any actions.
By 3.00pm yesterday sterling was down 0.5% at $1.5899 having earlier fallen as low as $1.5837. GBP/USD closed the day slightly higher and closed the session at around $1.5890.
Data from Rightmove yesterday was largely ignored due to the USD rebound; the data showed asking prices in England and Wales have risen for the first time in four months in October.
On top of the US gains sterling was also kept under the cosh by the Euro with the Euro strengthening by 0.4% on the day moving to €1.1386 and into Asian trading this morning at around €1.1390. The Euro may get the opportunity to re-test last week’s six month high of €1.1314.
Looking ahead this week analysts and investors eyes are focused on tomorrows spending review which leaves sterling venerable ahead of what is expected to be the biggest public cuts in decades.
The UK could follow the US into more QE, however perhaps not to the same extent with a figure of $1 Trillion being banded around in the press for the US.
The minutes from the MPC’s last policy meeting are also due to be published tomorrow which may give us more of an idea what to expect. A couple of things that we can almost guarantee is that Adam Posen will call for more QE and Andrew Sentence will continue to ask for a rate hike as he has been doing since June.
Whatever the outcome and whatever the reflection in the markets sterling is likely to remain under considerable pressure in the short term.
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.
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