We continue our daily look at factors affecting currencies allowing 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.
Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory. In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.
The markets saw a lot of volatility on Friday as sterling’s recent gains against the euro took a knock as speculation Ireland had been thrown a lifeline in the form of a bailout quelled some fears about debt problems facing some of the euro zone countries.
Yet Ireland’s finance ministry said talk of a bailout was untrue and a European commission spokesman said Ireland had not requested financial aid from the EU. Either way, traders took reassurances from the EU and G20 that bondholders would not have to take a write-down on Irish debt helped the single currency retrace some of its earlier week’s losses.
Sterling started the session trading at the day’s high of €1.1831 but after the news dropped to the day’s low of €1.1687 but ended the day’s trading near the €1.1787 level. The pound gained nearly 2% against the single currency during the week.
"There is still room for more pressure on the euro, but given how far we've moved this week and the possibility that something could be agreed (on Ireland) over the weekend, this will make people wary of continuing with their positions," said currency strategist at Standard Bank.
The issues with Ireland could also been seen as sterling negative as there is talk the UK could be involved in some kind of bailout for Ireland as we may see some UK banks exposed.
Consumer confidence for the UK fell in October to 52 against expectations of 54 this is the lowest since March 2009
The euro also saw pressure after Germany released their GDP figures for Q3 the figure fell to 0.7% against expectations of 0.8% and Year on year this figure was down to 3.9% against the last release of 4.3%. The European Union also released their GDP figure which fell to 0.4% against market expectations of 0.5% with the Year on year figure showing no change at 1.9%. The weak euro zone data continued as the European Monetary Union also released weaker industrial production which came in at -0.9% for September against predictions of 0.5%.
Against the dollar sterling started the session trading near the day’s low of $1.5987 yet gained ground in the afternoon session to end the day at the high of $1.6174
This week investor’s focus will be on the inflation data expected to show price pressures remaining elevated and Bank of England minutes giving more clues on the view of policymakers about where the risks are to the economy
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 Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates. This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.
One of the most general reasons why currency rates fluctuate is because they are all tied in with their specific countries. The events happening in every country make an impact on the currency rates that play in the forex market.
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