subject: All About The Investment Benefits [print this page] 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 rose to a 6 month high against the dollar yesterday, as recent positive economic data and strong banking figures increased appetite for the pound.
Major Bank HSBC, recorded profits of 7bn through the first half of 2010, and even so called bad bank Northern Rock made a 167m profit compared to a 243m loss this time last year. This is all hugely positive for the UK economy and sterling, as a major part of outside investment into the UK, is determined by the performance of the banking sector.
The banking profits along with the recent positive 2nd quarter GDP figures and strong manufacturing data have helped rally sterling over the past few weeks, and after concerns about the US economy slowing and possibility for further monetary easing by the US Fed, sterling rose to a 6 month high $1.5968.
Sterling is pushing close to the $1.60 level; this level is deemed to have a strong psychological barrier, and as analysts believe that there are many options barriers around this level it will take some fresh impetus to breach this level.
Against the euro sterling pushed close to 1.21 reaching a day high of 1.2088, but dropped slightly across the board after UK Construction Purchasing Managers Index fell to a four month low of 54.1 in July, from 58.4 the previous month. This is usually a well overlooked figure but given the 0.4% addition to last months GDP figures from construction alone, this was seen as an important indicator of future results.
By the close of UK trading sterling was trading at around $1.5930 still 0.3% up on the day, and was down a fraction trading around $1.2039 against the euro.
Investors await the results from todays UK Services Purchasing Managers Index (PMI) which is expected to maintain its growth above the 50.0 growth level. Last months figure came in at 54.4.
Euro zone retail figures for June are released today at 10.00am, the euro continued to gain against the dollar reaching a 3 month high $1.3262 after the US Feds earlier announcement.
Analysts are now trying to get an indication as to who will increase their interest rates first. The US were expected to be the first but look the least likely after the Feds announcements but markets have seen shocks in the past. So any hints from policymakers will be sure to have an effect on investor bets. The Bank of England monetary policy decision is on Thursday, but the main focus will be on the quarterly outlook view, which will be released next week.
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.
