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 fell against the euro on Friday as anticipation an aid package would be agreedfor Ireland helped strengthen the single currency. The plan will be put in place to help thecountry cope with the current situation of their banking system and we should heardetails of the package this week. Some expects have warned that a rescue may not beenough to prevent contagion in the single currency.
The pound also fell against the dollar after China raised banks’ reserve requirements,denting stocks and riskier currencies as concerns grew that tighter policy would dampenChinese growth.
“There is nothing UK-specific. Sterling had benefited with the euro from the increasedlikelihood of an Ireland bailout package, but we are seeing a little enthusiasm being lostand now the China move is the main driver,” said currency strategist atBNP Paribas.
Against the dollar, sterling was down 0.5% at $ 1.5966, well below a high for theday of $ 1.6095.
Analysts said it could be significant that sterling closed the week below $ 1.60, making itdifficult for the currency to extend a recent rebound from a low of $ 1.5840 reached earlierthis week, its weakest since late October.
“There is some positioning unwinding that is weighing down on sterling,” said FX strategist at Lloyds TSB. “We could see some choppiness heading into theU.S. Thanksgiving week and if a solution to Ireland is put in place next week then wecould see the euro and the pound bounce.”
Against the dollar, technical analysts said sterling was supported around the $ 1.58region, given its 55-day moving average lay around $ 1.5825 on Friday, while the 50% retracement level of the pound’s rally in September-November came in around$ 1.58.
The pound saw some support from Bank of England policymaker Paul Tucker who saidcentral banks must not dilute their commitment to price stability, although this was short-lived with the market’s focus elsewhere.
Sterling has been supported since Wednesday’s minutes from the Bank of England’slatest policy meeting suggested improving economic data and stubbornly high inflationwould keep quantitative easing off the agenda for now, with many investors not expectingto see any suggestion of it for the rest of this year.
It was also helped on Thursday by data showing a recovery in UK retail sales after twomonths of declines, although government borrowing hit another record high.
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.
Russel mori writes for Gerard Associates LTD, for more information on QROPS, QROPS Pensions, QROPS List, QROPS providers, QROPS guernsey info available online.