A Quick Look at the Market Scenario

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 made further gains most notably against the dollar and euro on Friday following on from the pounds rally since the better than expected UK GDP figures which were released on Tuesday.

The pound reached a day’s high of €1.1526 which is a three week high; up from the previous session low of €1.1441 and against the dollar hit a day’s high of $1.6012 up from the earlier low of $1.5880.

Sterling has managed to perform well since figures earlier in the week showed the UK economy grew twice as fast as expected in Q3, easing concerns the BoE may opt for a further bout of quantitative easing at their next meeting in November.

Sterling’s rally was given a further boost as a survey showed an unexpected improvement in consumer confidence which surprised many that the public seemed less nervous over the governments pending spending cuts.

"Sterling still has the legacy of the stronger-than-expected GDP data, which has resulted in a bit of a reappraisal of the probability of QE," said currency strategist at Credit Agricole CIB.

"Sterling has been a laggard in the second half of the year and this has allowed it to make up some lost ground."

UK Mortgage approvals also rose in September, but still fell to the lowest level since February which shows the sector is fragile and broader credit conditions were tough. But many now feel the BoE asset buying would be put on hold for November at the least.

"We do not think there is enough in these figures to persuade more Monetary Policy Committee members to join with Adam Posen in believing that more quantitative easing is required," said an economist at Daiwa Capital.

Elsewhere the US dollar dropped against majority of its trading pairs over on-going concern the FED will need to increase their asset buying at their meeting this week. US gross domestic product rose at a 2% annual rate in Q3 which was down from the expected figure of 2.2% yet still showed an increase from the previous figure release of 1.7%. Many analysts now believe it will be a question of how much the FED will increase asset buying as opposed to if they will or not, with their two day policy meeting starting on Tuesday investors remain cautious on the run up to the announcement due on Wednesday.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for QROPS 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.

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