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 started Friday’s trading up against majority of its trading pairs, but these gains were short lived as speculation stalled with regards to the Bank of England increasing interest rates as there was a significant absence of clarity on the banks rate stance which was released on Thursday. The minutes from Thursday’s meeting will be released later in the month and it will show how the votes were cast for a rate hike and how close the bank really is to raising borrowing costs from the current record low of 0.5% which has not been changed since July 2007, as inflation pressures continue to mount.
Investors keenly await the release of the inflation report due next Wednesday where they will hopefully be able to gauge the Bank of England’s next move. Analysts may argue that signs of a pickup in inflation may not necessarily be positive for the pound. In addition to the inflation report we will see the release of UK consumer prices, retail sales and employment which will determine the pounds next moves.
Bank of England Governor Mervyn King has dismissed inflation risks as temporary, saying government spending cuts and slower than estimated economic growth will curb price pressures. Britain’s government has lowered spending and increased taxes to reduce the fiscal deficit from the estimated 10% of GDP in the year through to March.
The pound reached a day’s high of €1.1868 against the euro in the morning but by afternoon trading had fallen to a low of €1.1800. Sterling did not fare any better against the dollar as it fell from the high of $1.6111 to reach the day’s low of $1.5965 which was last achieved in late January.
The pound lost 0.6% against the dollar on Friday and has declined 0.7% this week but it must be noted overall this year it has advanced 2.5% against the greenback.
The UK released strong Producer Price Index data which showed input prices rose 13.4% on the year in January which was well above forecasts of 12.6%. It does highlight the on-going increase in inflation within the UK.
Risk aversion also continued within the markets as investors returned to the safe haven of the dollar amidst the increased political uncertainty in North Africa and the Middle East.
The US Thomson Reuters/University of Michigan index of consumer sentiment rose to 75.1 its highest level since June, from 74.2 in January.
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.
QROPS
No comments:
Post a Comment