Qrops Market Report - Higher Demand For Uk Assets Imminent

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.

Sterling reached a new five month high of $1.5638 against the dollar yesterday after the recent run of positive data improved the economic outlook for the UK. Positive retail sales data and impressive GDP figures last week increased risk appetite within the market as investors moved away from the safe haven of the dollar.

Even Bank of England Governor Mervyn Kings dovish comments did little to stall the rally in the pound; he stated the central bank was focused on the appropriate degree of economic stimulus, not applying the brakes. King said significant risks to the UK economy remain and monetary policy could still go in either direction.

The release of the Bank of England minutes last week showed a unanimous vote to hold off any further quantitative easing but the option was again discussed, the first time since February. Andrew Sentance who is known for his hawkish stance again voted for an interest rate increase for the second month in a row. Analysts now believe we may see other policymakers agree with Sentences views into rate increases sooner rather than later which will support the pound as it will widen the rate differential between the UK and other countries thus resulting in a higher demand for UK assets.

Andrew Sentance believes UK inflation risks continue and warrant a rate increase to

0.75%, yet his MPC colleague David Miles was quoted as saying an extension of the Bank of Englands 200 billion asset buying programme may be needed again in the future.

The pound reached a days high of 1.2025 against the euro up from the session low of

1.1953 seen earlier in the day and ended the days trading trying to break through the 1.20 barrier.

Forecasts from the National Institute for economic and social research warned the economic recovery would be slower than the government expects.

Elsewhere the dollar made another days loss after the recent run of weak data the US has seen continued, mortgage applications were down for the month of July. US Durable goods orders came in at -1.0% lower than the predicted figure of 1.0%. It all shows signs the US economy is not recovering at the rate it was expected to.

In the euro zone Germany released their consumer price index which came in lower at

0.2% against the predicted figure of 0.3%.

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.

by: adieaston

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