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 Qualifying Recognised Overseas Pension Schemes (QROPS) 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 session in the UK trading down against the dollar as investors expectations for strong US Non Farm payroll data, released later in day allowed the greenback to make gains across the board. The pound traded flat around the $1.5440 mark but fell to a low of $1.5407 its lowest level since December 30th.
The pound started the week making gains after strong manufacturing data help boost the currency but this was followed by a run of sluggish economic data which included weaker than expected figures in the services sector and construction sectors. Many analysts believe these figures were down to the adverse weather the UK saw in December and expectations are that they will rise again in Q1 of 2011.
The main focus with investors on Friday was the release of the Non Farm payrolls in the US, with many analysts raising their forecasts after the release of the strong private jobs report earlier in the week.
The release of the data from the US Labour Department showed payrolls increased by 103,000 in December after a revised increase of 71,000 in November, but was still below economist’s expectations of 175,000. The overall unemployment rate fell unexpectedly to 9.4%, this release allowed sterling to recover ground against a fluctuating dollar, but traders said the knee-jerk reaction to the data had not changed the broader trend.
Sterling reached hit a high of $1.5577.
The Fed’s chairman Ben Bernanke also testified on Friday his comments included, “it could take four to five more years for the job market to normalise fully,” Bernanke also stepped up the urgency of his call for a plan to reduce the federal budget deficit, saying “prompt adoption” of one could have economic benefits in the long and short run.
Sterling managed to continue to gain against a broadly weaker euro hitting a day’s high of €1.2035 over a 4 cent improvement from Tuesday’s low of €1.1585, the euro was under pressure due to the concern over euro zone peripheral sovereign risks and for now the pound seems to have an upper hand against the single currency, which has seen a fall of 2.1% against the pound this week which is its biggest weekly drop since mid-November 2010.
Yield spreads between Portuguese, Spanish and Italian 10-year government bonds and their benchmark German counterparts widened on Friday as markets looked nervously to next week's heavy debt supply.
The euro hit a three month low against the dollar as Belgian and Irish credit-default swaps reached a record and the cost of insuring the debt of Portugal and Italy rose.
Elsewhere trade-weighted sterling matched a two-week high of 80.8.
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 QROPS advice - essential for your security.
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