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).
The deteriorating euro zone situation is still the main market mover at the moment, and with the recent Ireland bailout, it seems the talk on the trading floor will remain the same, as bailouts for other euro zone members seem almost imminent.
The pressure on the euro is very evident, as the dollar pulls in the majority of investors bets due to its ‘safe haven’ status. The EUR/USD pairing has seen a fall from as high as $1.4280, to the 10 week low reached yesterday $1.2968.
Sterling has seen a mixed reaction to the euro zone scenario, as the UK economy is still perceived to be risky. Sterling did push to a 9 week high against the weakening euro, reaching €1.1969 in the afternoon. However the safe haven investment into the dollar has seen the pound depreciate to near 10 week low $1.5482.
US Consumer confidence came in at 54.1, above expectations of 52.9 for November, and shortly after the release head of ECB Jean Claude Trichet spoke about the European Central Bank slowing its withdrawal of its support to the regions financial institutions. The ECB meets on Thursday against a backdrop of intensifying pressure on the currency bloc's peripheral states, and is expected to announce how much support it will continue to offer to euro zone banks through the provision of loans. This took some of the risk association out of the markets and sterling pushed back up to around $1.5570
The problem for the euro zone is more countries are being dragged into the firing line for potential bail outs, at the start it seemed that Ireland were definite and Spain and Portugal were on the ‘maybe list. However over the past couple of days the likes of Belgium. Italy and even France have been mentioned as candidates. Yesterday saw the Year on year CPI figure for Europe on par with consensus at 1.9%.
However German unemployment figures for November were weak at -9k compared to the -18k estimations, although the overall euro zone figure for October was on par with consensus at 10.1%.
In the UK British consumer confidence weakened more than expected in November as people were the most downbeat about the prospects for their personal finances in almost two years, a GfK/NOP consumer confidence barometer showed. This data was largely brushed aside as the focus will be on UK PMI figures for November, which are due out at 09.30am today.
Investors will also focus on European PMI which could give the euro a base to work from if a positive figure is revealed.
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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