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.
Wednesday saw the release of Novembers Bank of England’s minutes and as predicted policy makers left key interest rates at the historic low of 0.5% as was widely predicted. There was also no surprise at the decision to leave quantitative easing at the £200 billion mark. Seven members of the MPC including Mervyn King voted to keep interest rates and quantitative easing at the same levels. As usual Andrew Sentance voted to raise interest rates by 25 basis points and to maintain quantitative easing at the 200 billion mark. Adam Posen voted the opposite as Sentance by voting to maintain rates at the 0.5% mark but wanted an increase in the asset purchase programme.
Also released at 9.30 was UK unemployment, the data showed that those out of work had actually fell in October by 3,700 to 1.47 million. The reversed the 5,300 rise that was recorded in September. The overall picture remains one of a jobs recovery that is much more sluggish than after previous recessions analysis say.
These two pieces of data helped the pound climb to a day high of 1.5938 against the dollar before recovering to a level of around 1.5920 throughout the afternoon trading session. The pound was sold off heavily in late Tuesdays trading session so this data was seen as a welcome relief. The pound also made gains against the Euro hitting a session high of 1.1794 failing to break the 1.1800 level.
Later in the afternoon we saw the release of CPI inflation for October which showed consumer prices had edged up by 0.2%, which was below the 0.3% expected. This 0.2% rise was put down to growing cost of gasoline offset by flat or declining costs in other parts of the economy.
Elsewhere the euro remained under pressure as the debt concerns of Ireland continued to weigh heavily on the single currency. The euro held to a seven week low against the dollar before making a recovery later on in the afternoon. Dublin has yet to decide whether or not to accept a rescue package from the European Union but many investors said they believed it was only a matter of time before they succumbed to pressure from other euro zone members.
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.
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