Gerard Associates International

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

N THE UK

 

·         Policy makers in the UK have been accused of not doing enough to promote competition in banking and nurture alternative sources of finance for small businesses.  As rates remain low and inflation is likely to continue to slow BoE Policy maker Adam Posen has pointed the finger saying that banks and policy makers are still risk averse and reluctant.

·         UK Purchasing Managers Index suggested a slight improvement in manufacturing, posting a figure of 52.1 versus expectations of 50.1 which resulted in GBP capitalising on a move higher against the dollar to $1.5857 and recovering back above €1.20 against the euro.

·         Having broken through a level of resistance at $1.5770 the pound moved to its highest level against the greenback since November of 2011.  Focus remains to the upside despite short term risk of a slight correction lower.

·         GBP/JPY is considered to have found a floor following a drop off in sterling during the month of January; the battle between these two safe havens seems to have changed direction and traders feel the pounds attack on key resistance level of 121 could pave the way for further gains. 

 

ELSEWHERE

 

·         Despite coming under increased pressure to join the bond swap being negotiated with Greece, the ECB remains coy over how it will help the country cut its debt burden. The Greek Government has until 20th March to reach a deal and release the second EU bailout.

·         Polish Finance Minister Jan Vincent Rostowski argues that factors such as the absorption of EU structural funds and recent measures undertaken by the ECB have stabilised conditions in the European environment; a feint voice against stiff criticism of German and French leaders.

·         All major currencies are trading higher against USD following better than expected PMI figures from China and Europe and the lower than expected figures for US ADP non-farm employment and PMI.

·         Switzerland posted retail sales a percent below expectations of 1.6%, but December saw a 21% rise in exports. Despite the offsetting effect of this information CHF lost value against GBP, EUR , USD and AUD and this morning’s worse than expected trade balance of 2.07B leaves the Franc open to further movement lower.

·         Australia posted a favourable trade balance (surplus) at $1.71B, exceeding expectations of 1.22B and bringing GBP/AUD and EUR/AUD to 1.4754 and 1.2280 respectively on the back of a boom in mining exports.

·         Japan posted a 15% figure for its year on year monetary base.  The Japanese bought the highest number of foreign bonds since September in the week ending 27th January, suggesting the BoJ are keen to hedge  against the risk of global inflation.

 

DATA TO LOOK OUT FOR (all times GMT)

 

·         Construction data for the UK is released later this morning, and the markets will be looking to asses comments expected from MPC member Posen at approximately 2.00pm.

·         US unemployment figures, forecasted for 373k, will be complimented by testimony from Fed Chairman Bernanke.

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5835

1.2048

1.4774

1.5813

1.4517

8.9560

8.2107

12.2790

10.66

12.19

120.516

USD

 

0.7613

0.9330

0.9986

0.9168

5.6558

5.1852

7.75

6.73

7.70

76.107

EUR

1.3135

 

1.2263

1.3125

1.2049

7.4336

6.8150

10.19

8.85

10.12

100.030

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE <?xml:namespace prefix = st1 />UK

 

• Sterling gained against a broadly weaker euro on Monday, ahead of an EU summit in Brussels, with investors cautious as talks continued between Greece and private creditors on a debt swap deal.  The pound pushed up from a day low 1.1901 to a day high 1.1974.
• Sterling fell against the dollar, tracking falls in EURUSD after a run of gains that have taken the pound above $1.57 from below $1.54 in mid-January. Traders and analysts saw levels above $1.57 as a good opportunity to take profit on those gains, which sterling fall to a day low 1.5654. 
• Sterling may come under pressure later this week if purchasing managers' surveys (PMIs) for January on the manufacturing, construction and services sectors add to the picture of a weakening economy and increase the prospect of more monetary easing from the Bank of England.
• Overnight GFK Consumer confidence gave Sterling a boost, as the figure showed an improvement to -29 in December, from -33 in November.  Sterling moved up from 1.5700 to 1.5774, its highest since November 21st after the data release.

 

ELSEWHERE

 

• EU chiefs arrived in Brussels yesterday to put the finishing touches on a German-led deficit-control treaty and to endorse the statutes of a 500 billion-euro ($656 billion) rescue fund to be set up this year.
• European finance officials began discussions on Sunday that a deal that Greece and its private creditors expect to complete in the coming days, after bondholders signalled they would accept government demands for a bigger cut in their debt holdings.
• European leaders failed to finalise Greece’s second aid programme because talks with banks over debt reduction aren’t completed, German Chancellor Angela Merkel said.  The Euro fell from a day high 1.3185  to 1.3076 against the dollar as investors sought safe haven currencies
• German Consumer Price Index figure for January showed a negative figure compared to December.  The -0.4% was down from 0.7% in December, but was slightly better than the estimated -0.5% expected.
• This morning German retail sales were significantly down, the figure was expected to be a positive 0.8%, however Decembers figure showed a -1.4% decline which was worse than the -1% recorded in November.
• US stocks fell, sending the Standard & Poor’s 500 Index lower for a third day, as European leaders sparred with Greece over a second rescue program.  Some investors believe “The question isn’t whether or not Europe goes into a recession, but how deep that recession is going to be,”
• An index of executive and consumer sentiment in the 17- nation euro area rose to 93.4 from a revised 92.8 in December, the European Commission in Brussels said today. That’s the first increase since February 2011, though it’s less than the median prediction of 93.8.
• The yen strengthened against all of its major counterparts as concern increased Greek bailout negotiations will hinder efforts to resolve the financial crisis, boosting demand for haven assets.  The yen appreciated 1.2 percent to 100.15 per euro at 10:08 a.m. in New York and touched 99.99, the lowest level since Jan. 23.

 

DATA TO LOOK OUT FOR (all times GMT)

 

• At 10.00am European Unemployment rate is expected to show a slight increase from 10.3% in November to 10.4% in December.
• At 3.00pm US Consumer Confidence figures for January are expected to show an improvement from 64.5 in December to 68.0

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5763

1.1935

1.4761

1.5738

1.4395

8.8737

9.1427

12.2232

10.62

12.25

120.166

USD

 

0.7572

0.9364

0.9984

0.9132

5.6294

5.8001

7.75

6.74

7.77

76.233

EUR

1.3207

 

1.2368

1.3186

1.2061

7.4350

7.6604

10.24

8.90

10.26

100.684

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

 

 

 

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE <?xml:namespace prefix = st1 />UK

 

• On Friday, GBP/EUR reached a high of €1.1993 but closed at the session low of €1.1890. Nearly two cents below last week’s close of €1.20755.
• Against the US dollar, sterling shed almost 0.5% in the afternoon but the pair bounced off the 1.5640 resistance level to touch a high of 1.5740 in late evening trade.
• GBP/AUD rose sharply from the day’s low of 1.4710 to the high of 1.4811 in the middle of the day.
• Prime Minister Cameron is attending the European Leaders’ summit today, his first meeting with European leaders since having vetoed treaty changes in December. His objectives are to protect the single market stating, “we want them to get their economies sorted out because that's causing us problems over here”. 
• Sterling continued its losing streak against the Indian Rupee touching it’s lowest since October 2011 at 77.1530. 

 

ELSEWHERE

 

• This week the spotlight is on the EU leaders’ summit which begins today and seeks to finalise operational details of the new fiscal compact by firstly institutionalising budget discipline in the region and secondly to reach an agreement on private-sector involvement (PSI) in the second Greek bailout which has now increased to $145bn.
• Market stakeholders will be looking for a speedy and practical implementation plan as well as a strict policy on offenders. However German 10 year bonds and European stocks have already fallen in anticipation of yet another failure to reach a viable conclusion.
• Spanish GDP contracted 0.3% in Q4 last year, indicating the economy’s approach toward the second recession since 2009 and also highlights the lack of effect government efforts have turning the situation around.
• Nicolas Sarkosy has stated his plans for a France-only 0.1% tax on financial transactions to be initiated in August. EU finance ministers are due to discuss a Europe wide levy in March although unlike the French proposal this is not intended to affect the bond market.
• Euro had made gains against US dollar on Friday, after opening at $1.3092 the pair had gained around 0.5% by lunchtime and rose a further 0.3% in the afternoon to post a 6 week high of $1.3225.
• The US had some disappointing data releases, the biggest surprise was the annualised US GDP for Q4 2011. The figure of 2.8% fell short of consensus by 0.2% but still made significant improvements on the previous figure of 1.8%.
• In addition, the consensus on US Real Personal Consumption Expenditures was shown to be too optimistic as the actual figure of 0.1% fell short of projections by 2.2%.
• The dollar’s only redemption was in the form of January’s Consumer Sentiment Index from Michigan, coming in at 75 it beat expectations by 1.1 and December’s release by 5.1.

 

DATA TO LOOK OUT FOR (all times GMT)

 

• Germany, releases CPI figures for January today. Expectations are for inflation to have fallen by 0.1% to 2.0%
• The US publish Personal Consumption Expenditure figures at 1:30pm today, all components are expected to remain fairly similar to last month’s figures.
• German retail sales however are pitched to be up 1.8% on December which will be a solid indicator of positive consumer sentiment if it materialises.
• Italy is trying to auctions as much as €6bn of five- and 10-year bonds today.
• Japan also has a variety of data out today, the most significant being unemployment figures for December. Whilst the consensus predicts no change from November’s 4.5, it is important to note that the figure was 5.10 just 12 months ago. 

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5659

1.1924

1.4863

1.5765

1.4372

8.8660

9.1551

12.1485

10.63

12.27

120.062

USD

 

0.7617

0.9492

1.0068

0.9178

5.6619

5.8465

7.76

6.79

7.84

76.673

EUR

1.3129

 

1.2465

1.3221

1.2053

7.4354

7.6779

10.19

8.91

10.29

100.689

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE <?xml:namespace prefix = st1 />UK

 

• Sterling started the morning session by trading in and around the $1.5650 level to later post a 5 week high at $1.5735 versus the USD.
• GBP/EUR hit a 4 week low on hopes of progress in Greek debt talks and worries about UK economic weakness posting a low of €1.1915 in the afternoons trading session.
• Analysts said poor fundamentals in the UK may limit any upside for sterling against the dollar, especially on the back of the release of the MPC meeting minutes on Wednesday.
• CBI figures released yesterday showed sales suffered their biggest annual fall in January since March 2009 (when UK was last in recession) posting a figure of -22 against a forecast -2.

 

ELSEWHERE

 

• USD has come under selling pressure after the U.S. Federal Reserve said on Wednesday it would keep interest rates near zero until late 2014 and the option for further QE still remains.
• EUR/USD traded as high as 1.3184 to its strongest in a month, stronger German consumer confidence contributed to this rally by easing concerns about a Eurozone recession.
• Japanese Yen rallied against the USD yesterday as US 10-year Treasury yields fell 2%, the dollar-yen pair is closely correlated with US debt with lower yields providing less incentive for Japanese Investors to seek income overseas, in turn strengthening the Yen.
• Italian 10yr bonds dropped below 6% (5.98%) for the first time since the ECB announced plans for emergency 3 year loans in December to prevent a credit crunch in the Eurozone.
• For the first ever, German 10 year bunds are selling at a lower yield that US Treasury bonds, yields are directly correlated to the risk attached to the investment and this turnaround in sentiment is significant as it shows despite the Eurozone crisis, Germany is still seen as safe bet.  a
• Low employment in Germany helped boost sentiment within the Eurozone for a 5th month in a row, morale in Germany should increase further in the month of Feb.
• EUR/USD repel negative EUR news including the continued rise in Portuguese bond yields and reports that the ECB is split on how to handle their holdings of Greek debt.
• There was also comments that a Greek deal could be close to with creditors ready to accept a lower coupon payment. A majority of these rumours end up being red herrings, so sceptical views remain about the accuracy.
• All 3 commodity currencies strengthened verses the USD amid the possibility of further QE from the US. The AUD and NZD both reached highs not seen since October and the CAD broke the parity line during yesterday’s trading. 

 

DATA TO LOOK OUT FOR (all times GMT)

 

• ECB President Mario Draghi, speaks today at 1.15pm
• US GDP is released today at 13.30pm, the market will be paying particular attention to this, from the release of the FOMC statement Wednesday evening, the data is expected at 3.0%
• US University of Michigan consumer sentiment figure, is released at 2.55pm and is expected to post a figure of 74.2 against last month’s figure of 74.0.   

 

Have a great weekend.

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5704

1.1979

1.4748

1.5728

1.4456

8.9031

9.1631

12.1820

10.64

12.26

121.004

USD

 

0.7631

0.9391

1.0015

0.9205

5.6693

5.8349

7.76

6.78

7.81

77.053

EUR

1.3105

 

1.2312

1.3130

1.2068

7.4323

7.6493

10.17

8.88

10.23

101.013

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

 

 

 

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE <?xml:namespace prefix = st1 />UK

 

• After yesterday morning being dominated by high and medium tier data, today sees only one release from the UK in the form of our CBI Realised sales figures, which shows the sales volume for the month and is forecast to show a slowdown in consumer buying.
• Yesterday saw erratic price movement as GBP/USD moved between the prices of $1.5618 and $1.5529, however overnight saw a volatile jump as cable breached the $1.56 level and posted a high of $1.5677, finding support around the $1.5650 level and resistance of the physiological level of $1.57.
• Yesterday saw the release of the UK MPC meeting minutes, the MPC voted 9 to nil in favour of keeping the asset purchasing program on hold, despite some other data in the month that pointed towards growth. There were comments in the minutes that suggest the door is still open for further QE, however not until the remainder of the program has been completed.
• UK Preliminary GDP for Q4 last year was released yesterday and showed that the UK economy slowed and contracted by -0.2% against the forecast -0.1% as the UK experiences the slowest recovery from a recession since the 1930’s. Fuelling speculation that the UK could be heading towards a double dip recession, so eyes will be firmly on economic data being released. Remembering, two consecutive negative GDP quarter readings mean that the nation is in a recession once more. 

 

ELSEWHERE

 

• Yesterday evening the FOMC statement released their statement which fuelled volatile trading as the Fed, left the door wide open for ultra-loose monetary policy for at least the next three years, releasing comments such as “monetary policy will remain highly accommodative” signalling that they are open to further their asset purchasing program. They also predicted that the interest rates for the nation will remain low until 2014 and set a formal inflation objective target as 2%, previous prediction for interest rates was that they would remain low until mid 2013, so the window is widening. 
• On release of the FOMC statement EUR/USD climbed over 1 cent and GBP/USD held a rally of just under a cent, as investor confidence in the dollar suffered, however this news is positive for equities and investors. This could suggest that the market was not expecting the openness of the FED to fire up the printing presses once more in a bid to support the economy.
• The euro gains against the USD however could be limited if Mario Draghi, European Central Bank president, were to make further comments about the ECB’s own commitment to low interest rates. There are views in the market place that the ECB could cut interest rates by a further 50 basis points in the coming months.
• US Pending Home Sales data released yesterday missed expectations massively, posting a figure of -3.5% against a forecast reading of -0.6% showing that the number of pending sales contracts on homes are slowing down in the nation.
• The Japanese Yen weakened against all major currencies yesterday due to weaker Japanese data and stronger risk appetite. Japans first annual trade deficit in more than 30 years asks the question how long can the nation rely on its exports to help finance its huge public debt, without the need to turn to foreign investors.
• The Reserve Bank of New Zealand, decides to keep rates on hold at 2.50%.

 

DATA TO LOOK OUT FOR (all times GMT)

 

• German Consumer Confidence figure released this morning shows better than expected results posting a figure of 5.9 against an expected 5.6.
• US Core Durable Goods month on month figures are released today expecting to post a gain of 0.9%.
• US Unemployment Claims are being released today at 13.30pm expecting to post a figure of 371K.
• New Home Sales in the US being released at 3pm to show a slight increase from last month’s figure of 315k to 321k. 
• Inflationary data being released overnight from Japan both of which are expected to show declines. 

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5685

1.1956

1.4740

1.5700

1.4429

8.8915

9.1652

12.1680

10.61

12.35

121.793

USD

 

0.7615

0.9398

1.0010

0.9199

5.6688

5.8433

7.76

6.76

7.87

77.649

EUR

1.3132

 

1.2329

1.3131

1.2068

7.4369

7.6658

10.18

8.87

10.33

101.868

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE <?xml:namespace prefix = st1 />UK

 

• Bank of England policy maker Adam Posen spoke last night and said officials will increase their bond-purchase target next month if new forecasts for growth and inflation justify expanding stimulus again. “If we choose to do more in February, which we may or may not, but IF we choose to do more in February, it’ll be because the forecast demands it,” The central bank, which last expanded stimulus in October to £275bn with a program that is due to be completed early next month. 
• GBPUSD continued on a steady rise yesterday but the pound rally stalled at the $1.5600 mark as US stocks erased gains and turned negative in afternoon forcing the pair to stay in the $1.55’s
• Tomorrow, the BoE will publish the minutes of the January policy meeting, revealing how the MPC voted. The Office for National Statistics will release the first estimate of fourth- quarter GDP data at the same time
• The pound remained below the key €1.20 level against the euro and has seen further losses this morning dropping to a low of €1.1918.

 

ELSEWHERE

 

• The euro pushed through the $1.30 level against the US dollar yesterday, bolstered by optimism that Greece was set to cut a deal with its private sector investors on a debt swap. Despite no official resolution, the markets are beginning to gain confidence that an agreement will be reached. The main stumbling block at this point seems to be over what coupon creditors will receive on the planned new bonds. Some official say that Greece will pay not more than 3.5%, while creditors are pushing for more than 4%.
• The Greek talks are now expected to be concluded by the end of this week and with a lot of Eurozone data the euro could see more positive movements.
• Although the US Dollar sustained losses yesterday, it consolidated against its leading counterparts in overnight trade.
• Brazil will make room for a more “flexible” monetary policy as the government seeks to ensure economic growth of at least 4% this year. President Dilma Rousseff said he will cut enough of Brazil’s 2012 budget to ensure the government meets its target of a budget surplus before interest payment of 139.8bn reals ($79.7bn).
• Spanish economy minister Luis de Guindos said Spain is sticking to its deficit goal even as the economy shrinks, underlining a rift in the month-old cabinet whether the nation can halve its shortfall during a recession.  De Guindos said Spain’s government has an “absolutely inescapable commitment” to austerity, when asked whether he agreed with Budget Minister Cristobal Montoro’s call on Jan. 22 for the European Union to ease Spain’s 2012 deficit goal to take the shrinking economy into account.
• India’s rupee rose past 50 a dollar for the first time since November as the central bank left borrowing costs unchanged today to support economic growth.  The Reserve Bank of India kept its benchmark rate at 8.50% at 11 a.m. in Mumbai. The central bank cut the cash-reserve ratio for banks to 5.5% from 6%.

 

DATA TO LOOK OUT FOR (all times GMT)

 

• A host of flash Manufacturing & Services data from Europe this morning. Both French & German sets of services data have shown a increase in confidence.
• Eurozone Industrial New Orders are released at 10.00amg a contraction of 2.1%.
• UK Public sector net borrowing forecasted at 12.4bn from a higher figure of 15.2bn seen in December.
• Core retail sales in Canada at 1.30pm, they have seen steady sustained growth in this sector in the last three months and are expecting another modest figure of 0.2% growth today.
• Bank of England Governor Mervyn King speaks tonight at 8pm in Brighton.

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5564

1.1929

1.4837

1.5702

1.4390

8.8665

9.1102

12.0780

10.48

12.38

120.203

USD

 

0.7661

0.9533

1.0089

0.9246

5.6968

5.8534

7.76

6.73

7.96

77.231

EUR

1.3053

 

1.2438

1.3163

1.2063

7.4327

7.6370

10.12

8.79

10.38

100.765

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE <?xml:namespace prefix = st1 />UK

 

• In the UK, on Wednesday it is expected that the preliminary Q4 GDP reading will indicate a slight contraction in the economy. Fuelling speculation of further Asset Purchases, figures of a further £100-200bn have been mentioned.
• A fairly busy week ahead for sterling data wise includes the CBI’s industrial and distributive trades surveys, consumer confidence and numbers on the public finance situation.
• With the current fragile state of the UK economy, and the recent turning point for sterling rallying back up to above $1.55, from a January low of trading down at $1.5269, the minutes of the January MPC meeting are pivotal for the currency medium term. This meeting will be closely monitored to look for the prospect of further QE and such a move could likely come at the February meeting.

 

ELSEWHERE

 

• Chinese banks are closed today for the Spring Festival.
• With markets remaining very much driven by swings in risk sentiment, the tone for the week could be set by the lack of progress in the talks on Greek debt restructuring and on whether or not a disorderly default can be avoided.
• The euro fell for a second day on concern that Greece will struggle to reach an agreement with creditors to ease its debt burden. European officials will forge ahead again today with crafting a long-term plan to tackle the region’s debt crisis, as banking and government negotiators continue trying to reach an agreement that will lighten the Greek debt burden through private investor haircuts, the only question seems to be will they be forced or voluntary?
• EUR/USD has had a turbulent week, opening last week at $1.2638 and closing at $1.2936. A volatile trend that looks set to continue as opening today was nearly half a cent lower at $1.2890. It could of and perhaps should have been a lot worse for the euro as it looks to have shaken off the recent S & P downgrades. Draghi’s flippant comments about the over reliance on credit scores may well have helped markets dismiss the downgrade.
• On the economic data front, the week sees the first estimate of Q4 US GDP. Other significant releases include pending and new home sales, durable goods orders, the final January Michigan sentiment reading and the latest weekly jobless numbers. Also, the US earnings season continues.
• Several other events in the week ahead that could help to determine market risk appetite, as well as the run-up to the EU Heads of State Summit on Monday, January 30th. From a global perspective, the views of attendees at the Davos World Economic Forum will be of interest as will be the latest economic update from the IMF.
• Japanese CPI data is likely to show the economy still mired in deflation with trade data indicating a fall in exports which has weakened yen across the board.
• Prices paid by Australian producers, one of two gauges of cost pressures in the economy released this week, decelerated for a third straight quarter, boosting scope for the central bank to lower borrowing costs next month, a critical decision which  may stem the recent appetite for commodity currencies like AUSD and NZD. 
• This morning Australian PPI came out slightly under consensus at 0.3%, which adds weight to the argument for reducing interest rates again.

 

DATA TO LOOK OUT FOR (all times GMT)

 

• Today is a fairly quiet day for data but as mentioned earlier, Eurozone finance ministers today and will discuss the Greece situation.
• Canadian Leading Indicators is released at 1.30pm and expected to show a drop from last month’s figure.
• At 3pm, Eurozone Consumer confidence expected to slightly improve but still show a very negative sentiment at -20 from a figure of -21 last month. 
• MPC member Adam Posen is speaking today in Nottingham, traders may look to this for any indications on further QE. 

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5527

1.2013

1.4788

1.5717

1.4506

8.9222

9.2245

12.0460

10.55

12.37

119.599

USD

 

0.7741

0.9524

1.0122

0.9342

5.7462

5.9409

7.76

6.79

7.96

77.026

EUR

1.2919

 

1.2310

1.3083

1.2075

7.4271

7.6788

10.03

8.78

10.29

99.558

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE <?xml:namespace prefix = st1 />UK

 

• Sterling made slight gains against the US dollar as a bank holiday in the US eased trade volumes, however GBPUSD remained close to 18 month lows as ongoing concerns about the Eurozone, and in particular the ratings downgrades leave risk appetite at a low.
• The pound remained over the €1.20 mark against the euro, driven by concerns following the European downgrades late last week as well as the weight of Greece and their next bailout.
• Sterling has been driven by safe haven flows and this was increased by the ratings downgrades as investors swapped their Euro government debt for UK Gilts instead driving the price down very close to a new record low.
• The UK treasury has this morning announced plans to make London the leading inter nation trading centre for trading the Chinese Yuan, saying that as a gateway to Europe London is the perfect base for Asian banking and investment.
• House prices in England and Wales fell by 0.8% on the month (+0.4% on the year) in January, according to property website Rightmove, to £224,060. In December prices fell 2.7% on the month, to £225,766 (+1.5% on the year). 

 

ELSEWHERE

 

• Following yesterday's news that the Euro was close to an 11 year low against the Japanese Yen the pair swiftly broke that new record following investors seeking the safe haven Yen falling to 97.04. The Yen gained against 13 of its 16 key trading partners giving an indication of the knock on effect of the Eurozone downgrade.
• In news this morning the European Financial stability Fund (ESFS) has lost its triple A credit rating following the downgrade of France and Austria last week. The rating was cut to AA+ from AAA, S&P had warned that it may face a downgrade if it's guarantors lost their triple A status.
• Concerns over the latest Greek bailout and whether it will go through may ease on Wednesday, following the stalling of talks due to a disagreement about how much money investors will lose by swapping their bonds. Talks between Greece's Prime Minister Lucas Papademos, Finance Minister Evangelos Venizelos, and Charles Dallara, the managing director of the Institute of International Finance, which represents private creditors, will resume Jan 18th.
• Canada's dollar rose against all but two of its 16 major peers on speculation its exports will benefit from accelerating U.S. economic growth. Reports on manufacturing from the Fed may show further growth later this week.
• In news this morning China's GDP fell to a 2 and a half year low but beat expectations posted allaying fears that China is set for a hard landing, this led to a selloff of safe haven currencies such as the US dollar and JPY and brought a touch of risk appetite back to the market.
• Off the back of the Chinese data this morning the Australian dollar posted some consistent gains against a host of currencies as investors foresaw a demand for commodities from China, Australia's biggest export market. 

 

DATA TO LOOK OUT FOR (all times GMT)

 

• A busy morning for data starts with UK Consumer Price Index figures and Retail Price Index figures at 9.30am. Inflation has been stubbornly high causing problems for the economy but today’s CPI reading is expected to fall slightly to 4.2% whilst RPI is forecast to fall to 4.8%
• Bank of England Governor Mervyn King speaks today at 10.00am.
• Eurozone Inflation figures are released at 10.00am, like the UK, annual inflation is expected to have fallen slightly to 2.8%.
• German ZEW survey is released at 10.00am and will give an indication of sentiment surround the German economy.
• Bank of Canada release their interest decision at 2.0pm, they are expected to leave rates on hold at 1%
• Westpac Consumer Confidence figures are released for December at 11.30pm

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5360

1.2039

1.4733

1.5563

1.4560

8.9501

9.2297

11.9280

10.63

12.30

117.665

USD

 

0.7838

0.9592

1.0132

0.9479

5.8269

6.0089

7.77

6.92

8.01

76.605

EUR

1.2758

 

1.2238

1.2927

1.2094

7.4343

7.6665

9.91

8.83

10.21

97.737

 

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE <?xml:namespace prefix = st1 />UK

 

• Producer Price Index figures on Friday morning in the UK showed a fall in prices that manufacturers buy and sell at. The pound was left mainly unaffected after the announcement but values fluctuated later on as overseas developments took place.
• During the course of the day the pound made gains versus against the euro as rumours circulated trading floors that several Eurozone nations would be downgraded, GBPEUR rallied back through the psychological €1.20 mark to hit a high of €1.2091 late in the evening.
• GBPUSD didn’t fare so well, falling to a 18 month low of $1.5234 tracking a fall in EURUSD as concerned investors head to the reassurance of the safe haven currencies.     
• George Osbourne will sign a deal today with Hong Kong to help the City of London become a offshore trading centre for the Chinese Renminbi.

 

ELSEWHERE

 

• The main news last week was S&P’s decision on Friday to downgrade the credit ratings of 9 Eurozone member states, the most notable of these were France and Austria being downgraded from the top tier AAA rating.
• Concerns now surround the European Financial Stability Facility as France and Austria’s downgrade mean the fund could lose its own AAA rating and potentially  €180bn of lending capacity.  
• Sentiment over Europe had started to improve last week and bond auctions went well, EURUSD had risen sharply to a high of $1.2874 before losing over 2 cents to fall to $1.26342 ahead of the S&P announcement.
• Adding to Eurozone woes were threats of a Greek default increased after talks to restructure the country’s debt broke down. Negotiations failed over the size of the haircut to be taken by banks.
• Following the French downgrade, EURJPY hit a fresh 11 year low of 97.15yen, the euro under obvious pressure and yen benefiting from it’s safe haven status being both contributing factors.  
• In the US, some of the optimism about housing, consumer spending and the broader economy eased back a bit last week, amid a splattering of weaker economic reports. Retail sales rose just 0.1% in December and core retail sales fell by the same amount. Holiday sales came in right in line with expectations, rising 5.1%.
• US weekly first-time jobless claims spiked up to 399,000 and job openings listed in the JOLTs survey fell slightly..
• Former MoF official Sakakibara (aka Mr. Yen) expects that Japan could be downgraded soon; Strong Yen is likely to continue, however any intervention in the market would most likely be unsuccessful without the help of the US.

 

DATA TO LOOK OUT FOR (all times GMT)

 

• A relatively quiet day for data today, markets will be accessing the fallout from Friday European downgrades and how they will affect the Eurozone crisis.
• Eurozone President Draghi speaks this evening at a press conferences with Q&A, he will undoubtedly face many questions about the severity of the downgrades and how they affect the EFSF.  
• Business Confidence Figures are released in New Zealand tonight at 9.00pm

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5313

1.2079

1.4840

1.5613

1.4601

8.9836

9.2798

11.8970

10.70

12.43

117.676

USD

 

0.7890

0.9691

1.0196

0.9535

5.8666

6.0601

7.77

6.99

8.12

76.847

EUR

1.2675

 

1.2286

1.2926

1.2088

7.4374

7.6826

9.85

8.86

10.29

97.422

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

 

 

 

 

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE <?xml:namespace prefix = st1 />UK

 

• The Bank of England as expected left rates unchanged at 0.5% and Quantitative easing at 275bn creating some relief and helping sterling climb to $1.5408 early this morning from the three month low of $1.5279 hit yesterday.
• Most traders still expect the Bank of England to extend quantitative easing at the February meeting, which is acting as black cloud over the pound’s head, any comments suggesting this in the coming weeks will weaken sterling.
• Sterling tumbles against the euro as successful Spanish and Italian debt auctions bring some relief to the euro, sterling has already fallen to a low of €1.1936 this morning
• UK Industrial output falls 0.6% in November, heightening concerns over the strength of the economy.
• George Osborne debates on whether Scotland should use the pound or the euro if there were to become independent. Alex Salmond’s says Scotland would initially use the pound and enter into the euro at a later date. Osborne thinks this plan will fall apart.
• Sterling continues to fall against the AUD, already hitting a low of AU$ 1.4837 this morning 
• UK Producer Price Index reveal slightly worse than expected figures, all components fell however this has not affected the pound so far.

 

ELSEWHERE

 

• Spanish and Italian debt Auction go better than expected yesterday, Spain sold double the targeted amount and raised €10bn whilst Italy raised €12bn. In response, the euro strengthen across the board with EURUSD moving back above $1.28, hitting a high of $1.2878 this morning.
• Following the auction, the benchmark Italian and Spanish 10-year bond yields fell respectively to 6.55% and 6.08% in the secondary markets
• In their monetary policy meeting, the ECB as expected kept rates unchanged at 1%, Draghi’s comments helped the euro as he indicated there were signs of stabilisation in the Eurozone and suggested no immediate plans for a further rate cut.
• China’s foreign exchange reserves drop for the first time since 1998, falling to $3.18 trillion on Dec 31 from $3.2 trillion Sept 30 as foreign investments moderate, trade surplus narrow and Europe’s crisis spurred investors to sell emerging market assets.
• The US dollar was hit by the European bond auctions going better than expected as investors fly out of the safe haven and move to riskier assets.
• US unemployment benefits jumped last week rising to a six week high of nearly 400,000 jobs
• US retail sales continued their upward crawl in December, rising 0.1% in the month according to initial estimates 

 

DATA TO LOOK OUT FOR (all times GMT)

 

• European trade balance for November is released at 10.00am.
• US trade balance is due out at 1.30pm and is expected to come in at $43.47bn which is lower than the previous figure of $45bn
• At 2.55pm, the Michigan Consumer Sentiment Index is released, the recent good run of US data is expected to have push sentiment up to 71.5 from 69.9.

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5346

1.1954

1.4826

1.5623

1.4466

8.8938

9.2179

11.9157

10.63

12.37

117.676

USD

 

0.7796

0.9661

1.0181

0.9427

5.7955

6.0067

7.76

6.93

8.06

76.682

EUR

1.2827

 

1.2403

1.3069

1.2101

7.4400

7.7111

9.97

8.89

10.35

98.441

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE UK

 

• The Bank of England are expected to keep interest rates on hold this afternoon at the monthly interest rate decision meeting and will maintain its £275bn bond purchase target.
• UK services and manufacturing gauges unexpectedly rose last month, showing the economy gained a little strength (but only modestly); however the BoE has indicated that the economy may in fact be stagnating as recovery is impaired by the European debt crisis.  Sterling opens trading today against the euro at €1.2036, nearly a cent down on the start of the week.
• Debt worries in the Eurozone weighed on the London markets yesterday as disappointing economic data dampened the mood and pulled the FTSE lower.
• Today sees an illustration of how Britain can be affected by the Eurozone crisis as RBS announces 3,500 jobs losses.  The European crisis has forced securities firms to scale back or close divisions that trade European equities – and the UK and The City is acutely affected by this shift. 

 

ELSEWHERE

 

• Although showing growth of approximately 3% over the year, the German economy worried the markets by posting a contraction of 0.25% in an unofficial release.  Schulz, a senior economist at Berenburg, sees a ‘25% chance of the euro crisis remaining out of control longer…spiralling out of control with a series of sovereign and bank defaults’.  In such a scenario, Germany would enter a major recession.
• The euro suffered from heightened risk aversion as some investors may expect the euro to drop should the union break up.
• Rumours have surfaced that the French government had be notified by S&P that a downgrade of its AAA status is looming.
• Despite morning gains against both GBP and USD, the euro ended the day at $1.2698 against the greenback, with losses compounded on the back of EU growth forecasts.
• USD saw a definite flight to safety in light of these concerns over a European recession.  USD moved to a 16 month high against euro, whilst cable fell to a three month low of $1.5308.
• Officials from the Fed reserve are undecided on the need for further easing. Sung Won Sohn, former chief economist at Wells Fargo suggests that “ despite recent signs of improvement, Fed officials are very vigilant about the economic recovery continuing and improving,”
• Asian stocks fell for the first time in four days, while gold rose as data showed slowing demand for Japan’s exports. 
• Oil rallied 0.5% to $101.38 a barrel, while natural gas slumped to a 28-month low – easing the pinch on domestic costs a touch.
• The New Zealand dollar weakened against 15 major currencies but still remains at an inflated value of 1.9228 against the pound  - this slide is largely due to a drop in the value of commodity prices according to ANZ bank. 

 

DATA TO LOOK OUT FOR (all times GMT)

 

• Today both the ECB and MPC deliver their monthly rate decisions.
• The United States release both core and non-core retail sales data at 13:30, with both expected to have increase by 0.1%.
• US Unemployment Claims are also expected to climb.

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5304

1.2025

1.4846

1.5584

1.4569

8.9430

9.2180

11.8920

10.60

12.36

117.695

USD

 

0.7859

0.9701

1.0183

0.9520

5.8436

6.0233

7.77

6.93

8.08

76.905

EUR

1.2724

 

1.2346

1.2960

1.2116

7.4370

7.6657

9.89

8.81

10.28

97.875

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE <?xml:namespace prefix = st1 />UK

•  Sterling rose to a fresh 16-month high €1.2137 against the euro on Friday and looked set to stay supported as investors concerned about Eurozone sovereign funding pressures reached for the relative safety of the UK currency.
• Early on Friday, Halifax House Prices fell 0.9% in December, a moderate improvement was expected, however this did little to affect the pound.
• There was solid demand at UK gilt auctions earlier in the week, and BoE data also showed foreign investors increased their gilt holdings by £16.3bn in November, the largest monthly rise since September 2008.
• While supported versus the euro, the pound suffered versus a broadly strong dollar after the recent euro sell offs, investors have hedged the majority of their investment into the safe haven USD dollar, sterling fell around 0.7% to  $1.5376, but finished trading around $1.5415.

 

ELSEWHERE

 

• Eurozone data was mixed on Friday, Consumer, Economic and Industrial Confidence all showed minor gains.  However European retail sales were down from -0.1% in October to -0.8% in November, the YoY figure showed a downfall from -0.7% to -2.5%. German Factory orders were down significantly MoM from 5.0% in October to -4.8% in November.  Consensus estimated a fall to only -1.8%, meaning the fall in new and unfilled orders in Germany was down significantly.
• Today sees another Merkel-Sarkozy meeting, which will set the tone for the finance ministers’ meeting and leaders’ summit later in the month (23 and 30 Jan).
• Market players are likely to remain cautious ahead of Italian and Spanish debt auctions next week that are seen as those countries' first major refinancing tests of 2012.
• US Non-Farm Payrolls came in above consensus, showing 200k jobs were added in December, double Novembers figure and above the consensus estimation of 150k.  This encouraged a surge in USD purchasing on the view that US economic activity is picking up faster than in the UK.
• The US unemployment rate unexpectedly fell to 8.5%, the lowest since February 2009, from 8.7% although experts feel it could take up to three years to return to pre recession levels.
• The US dollar moved below $1.27 versus the euro, its strongest level since early September 2010. The euro has lost 5.1% versus the dollar over the past month and dropped 5.8% against the yen as investors sought refuge in safe havens, amid Europe’s sovereign-debt turmoil.

 

DATA TO LOOK OUT FOR (all times GMT)

 

• There are no significant UK data releases today.
• This morning, Eurozone Sentix investor confidence data will be released, expectations are that the figure will improve from -24.0 to -21.3 for November.
• At 11.00pm German Industrial Production figures are expected to show a decline from 0.8% in October to -0.4% in November
• Canadian CPI for December is released at 12.00pm, currently CPI stands at 2.9%.
• At 8.00pm US Consumer Credit Change data is expected to show a slight decline in borrowing from $7.65B in October to $7.30B in November

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5434

1.2091

1.5104

1.5867

1.4689

8.9883

9.2770

11.9850

10.68

12.59

118.735

USD

 

0.7833

0.9786

1.0281

0.9517

5.8237

6.0108

7.77

6.92

8.16

76.931

EUR

1.2767

 

1.2492

1.3123

1.2149

7.4339

7.6726

9.91

8.83

10.41

98.201

 

 

 

 

 

 

 

 

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE UK

• Wednesday saw The MPC minutes reveal a unanimous vote to hold UK interest rates at their record 0.5% low for another month and although members did not rule out the possibility of further QE completely, they did vote to hold the current facility at £275bn.  Their sentiments were broadly dovish which pushed the pound to an 11 month high against EUR.
• Public Sector Net Borrowing came in under the 15.5B expected volume at a level of 15.2B.
• Ratings agency Moody’s acknowledged the severity of the UK plight, but asserted that Britain deserved to retain its AAA rating which helped the pound gain against EUR.  GBP/EUR breached 1.20 with a high from the day of 1.2043.
• UK retail insolvencies may reach the highest level in four years according to restructuring firm ALIX Partners; poor forecasts for UK retail sales over the Christmas period may put a dampener on the headway made by the pound in recent days. 
• GfK NOP UK consumer confidence fell to its lowest level since February 2009 decreasing -33 points in December from -31 the month before.

 

ELSEWHERE

• Although the number of Existing Home Sales in the US fell short of the expected 5.04M to 4.42M realtors are happy to see a month on month increase (in spite of a change to the calculation metrics that had been used since 2007).  USD moved up to a high of 1.5662 against the pound simultaneously.
• European banks have asked to borrow €489bn from the European Central Bank’s new three-year loan facility, smashing expectations forecasted at €293bn.  Demand within the banking sector for this short term liquidity is mirrored by an on forecast level of European Consumer Confidence which published a -21 response.
• Danish Prime Minister Helle Thorning-Schmidt faces domestic opposition to the proposition of deepened fiscal ties within Europe even after he vowed to fight on for unity in the area.
• Rumours of a French sovereign debt downgrade were still doing the rounds yesterday, which served to further sour sentiment.
• EUR/USD failed to move outside its range bound trading, and analysts feel that the risk is now to the downside for the single currency as risk off returns to the market.  At present 1.3080 represents the immediate level of resistance for the pair after EUR attempted to win favour at 1.32, but pundits feel that 1.30 could well be tested as yesterday’s lows signified an important break.
• New Zealand’s quarter on quarter GDP figures achieved higher than market expectations reaching 0.8% as opposed to an expected 0.6%; this has seen GBP/NZD move down to 2.0353 overnight following sustained trading in GBP favour over the past week.

 

DATA TO LOOK OUT FOR (all times GMT)

• Data is somewhat soft for today with Final GDP and quarterly Price Index figures released at 13:30 for the United States.
• Final GDP figures are expected to come in at 0.5%
• US unemployment claim, expected to be higher than the previous 366k posting, are also due at 13:30.
• Core Durable Goods Orders also make appearance on Friday which may put pressure on the greenback.

Portfolio and fund managers will be looking to window dress their portfolios before year end, so watch out for a return to risk off an quality as the week draws to a close.

Current Spot Rates (9.00am)

22nd December 2011

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5702

1.1990

1.5508

1.6086

1.4637

8.9147

9.2900

12.2230

10.78

12.86

122.600

USD

0.7636

0.9876

1.0245

0.9322

5.6774

5.9164

7.78

6.87

8.19

78.079

0.7636

EUR

 

1.2934

1.3416

1.2208

7.4351

7.7481

10.19

8.99

10.73

102.251

 

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

The Bank of England voted unanimously to keep rates on hold earlier this month, but they have not ruled out the possibility of further quantitative easing.  GBP improved against both USD and EUR yesterday and into the early hours of this morning (against EUR it was not by much, but sterling it determined to entrench itself in the new rate of 1.1850 and above).  Given the correlation between GBP, USD and EUR I believe that improvement against the greenback signals something of an increase in marginal risk appetite, and from that we may see a fractional loss on GBP/EUR…or rather, had the BoE not come out to assure the market it would release emergency funds to protect UK banks, I would have expected a slight lessening of aggression from the pound.

 

IN THE UK

• UK Chancellor George Osborne cuts UK growth forecasts for the next four years and says borrowing costs will rise by £111bn, as he warned the Eurozone could drag the UK into recession The pound pushed to a week high €1.1723 from the day low €1.1613 as the euro was sold off.
• Sterling holds firm against the US dollar as most of the bearish news from George Osborne’s statement has already been factored in, this helped sterling hit a one week high of $1.5655 on Tuesday
• Osborne also warns that Britain faces two years extra years of austerity as he sought to shore up his deficit-reduction plans, intensifying a conflict with unions that will stage a mass walkout.  
• Fitch warns that more shocks from the UK would seriously test its triple A credit rating. The top tier credit rating has been supporting healthy demand for UK Gilts; a downgrade would have serious implication for government debt management, reverse the UK’s recent safe haven status and place the pound under extreme pressure.    

 

ELSEWHERE

• Eurozone finance ministers agree ways to boost the strength of Europe’s bailout fund and have raised the possibility on the IMF getting more resources in order to help Eurozone countries that have been struggling to raise funds.
• The US dollar falls across the board yesterday as commodity currencies continued to rise amid improved risk appetite helped by a surprise rise in consumer confidence.  
• Following a five-hour meeting, ministers also agreed to release the €8 billion Greece needs to avoid bankruptcy and took the first steps to approve the next €8.5 billion tranche of Ireland's bailout
• The Australian and New Zealand dollar continued to rally in London trading, the AUDUSD rose above parity to reach $1.0021, a rise of 1.3%, the New Zealand dollar rose 1.1% to $0.7627
• The euro found support against the US dollar on Tuesday as the Italian bond auction goes well, selling €7.5bn debt at auction, though its costs reached euro area highs, EUR/USD has hit a high so far this morning of 1.3358
• The SEK and NOK gains sharply against the Euro, the SEK was helped by a massive export led 1.6% rise in Q3 GDP, Norwegian GDP growth was also higher in Q3.
• This morning German Unemployment falls dramatically by 20k, helping the euro recover some of yesterday’s losses against the pound.  

 

DATA TO LOOK OUT FOR (all times GMT)

• Eurozone Employment Rate is released at 10.00am and forecast to show no change from last month at 10.2%
• Eurozone Core CPI data is also released at 10.00am, last month figure showed inflation was at 1.2%.
• US ADP employment for November is due out this afternoon and is expected to come in at 131k, beating last month figure of 110k.
• US Non-Farm Productivity is release at 1.30pm along with Q3 Canadian GDP.
• The Fed’s Beige Book is released at 7.00pm and will give a very clear picture of US economic conditions. There have been some positive data releases in the US recently so if the results carry a more optimistic tone, risk appetite could be helped overnight.

 

Current Spot Rates (9.00am)

21st December 2011

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5739

1.1969

1.5433

1.6085

1.4367

8.7171

9.1376

12.1160

10.77

13.07

121.459

USD

 

0.7531

1.0022

1.0332

0.9229

5.5994

5.8695

7.78

6.92

8.40

78.018

EUR

1.3278

 

1.3313

1.3724

1.2259

7.4378

7.7966

10.34

9.19

11.15

103.634

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE UK

 

• The Bank of England Quarterly Bulletin was held yesterday and confirmed the gloomy outlook for the UK economy. Unemployment has remained higher than before the recession, and credit conditions are still tight.

 

• The pressure on household finances intensified in December, with new figures showing the squeeze is now heading towards the record levels recorded in August.  Britain's recovery from the recession of 2009 has been slowed by falling consumption "reflecting the challenging environment facing  households".

 

• Data showed 56% of households reported a fall in deposable income in the last 12 months whilst only 13% saw a rise.

 

• UK Chancellor, George Osborne, believes the economy will grow 0.9% this year and just 0.7% in 2012. This figure has been revised downwards twice in the last 12 months. He announced new regulations covering UK banking. Very simply, retail and investment banking will be separated within banking institutions to help avoid the problems seen in 2008 when Northern Rock, RBS, Lloyds and HBOS hit the headlines.

 

• Yesterday’s news was not all bad as Dr Howard Archer, chief UK economist IHS said November's dip in inflation to 4.8% from a three-year high of 5.2% in September should mark a step in a substantial downward trend that will increasingly ease the squeeze on purchasing power.

 

• Rating agency Fitch cut several big name banks including UK based Barclays.  Concern about the UK's heavy exposure to the banking industry is likely to put pressure on the pound as trading winds down towards the year end.

 

ELSEWHERE

 

• The Euro lost further ground after Draghi admitted the law prevents him from extending the euro bond purchase programme further.

 

• Eurozone sovereign associated risk remains unchanged, the ECB’s new head told the EU parliament that purchases of peripheral debt were temporary and "not infinite”.  He was also downbeat on the region’s growth prospects, saying that 2012 will be a difficult year for the Eurozone's banks and that recovery in economic activity is likely to be slow.

 

• Following several days of intense speculation of forthcoming rating cuts, Fitch has placed France under a negative rating outlook for a possible downgrade The rating agency explains that the country has the highest structural budget deficit and more debt than its peers. This negative outlook means that there is more than a 50% chance that France will lose its triple-A rating over the next two years.

 

• Belgium, Spain, Slovenia, Ireland, Cyprus, and Italy were placed under credit watch negative. These countries already had a negative rating outlook so the new warnings have put their ratings at more risk. Fitch said it will reach its conclusion in January and the cut could be of one or two notches.

 

• Pressure is mounting on Spain after the latest set of disappointing figures were released yesterday. The bad loans rate for the Spanish financial sector rose to 7.416% in October. Overall, €131.908bn in loans were more than three months overdue and October's rate was the highest since November 1994.

 

• Markets opening was mixed on Monday, as news that North Korean leader Kim Jong Il died of a heart-attack circulated the markets. Although his son is expected to succeed him, the news has South Korea's military and other countries on alert at the wait for the succession to be confirmed. Asian stocks reacted with general losses.  The South Korean Kospi fell more than 5% while Japan's Nikkei fell 1.26%.

 

• The US Dollar rose off the back of the uncertainty versus the majors and the South Korean Won. This news has unleashed some rumours about the relationship between the two Koreas, ranging from the possibility of new confrontations to a possible unification.

 

• Germany, the Eurozone’s biggest contributor had promising IFO figures released this morning, all 3 components showed healthy rises. Possibly the most important European data release of the week shows that Germany is still performing well.

 

DATA TO LOOK OUT FOR (all times GMT)

 

• CBI Distributive Trade Survey is released at 11.00am in the UK, an indicator of trends in the retail and wholesale sector. The markets are expected a slight improvement from last month’s -19% to -17%

 

• Canadian inflation figures are released at 12.00pm, both annual CPI and Core CPI are expected to show rises to 2.2% and 2.9% respectively.

 

• US Building Permits are released at 1.30pm and expected to show the number of permits dropped slightly in Nov, however actual Housing Starts is expected to have risen in Nov.

 

• New Zealand Current Account Information is expected to show net flow of cash has

dropped significantly into the red, -$3.755bn from -$0.92bn last month.

 

 

 

 

Current Spot Rates (9.00am)

20th December 2011

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5575

 

1.1944

1.5619

1.6105

1.4558

8.8779

9.2090

12.1170

10.71

12.95

121.284

USD

 

0.761

1.0028

1.0340

0.9347

5.7001

5.9127

7.78

6.88

8.31

77.871

EUR

1.3036

 

1.3077

1.3484

1.2189

7.4329

7.7101

10.14

8.97

10.84

101.544

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE UK

 

• Asking prices for a property in the UK declined for the second consecutive month in December, the latest survey by Rightmove showed early this morning. The Rightmove House Price Index, a leading indicator of residential property prices in England and Wales, dropped 2.7% (MoM) in December, following a 3.1% fall in the previous month. Annually, asking prices rose 1.5% in December compared to 1.2% increase in the previous month.                                                                                                                                                            

• GBPUSD was around the $1.549 area this morning as dollar continued to receive safe haven status as the European solution looking less and less likely in the medium term.                                                                                               

• Against the euro, sterling has found some relative safety as a 'buy only' pair and on Monday morning continued to hover around the €1.19 level.

 

ELSEWHERE

 

• On Friday, Fitch become the latest ratings agency to cut its outlook on France's AAA rating and said it might downgrade the ratings of Italy, Belgium, Ireland, Spain, Slovenia and Cyprus blaming any comprehensive solution to the European debt crisis.

 

• Fitch also downgraded the long-term credit ratings on six major banks including US banks Goldman Sachs, Bank of America, Morgan Stanley. Fitch cited the issues facing the banking sector and the exposure these banks have to the European debt crisis.

 

• Fellow rating agency Moody’s downgraded Belgium’s sovereign credit rating by two notches from Aa1 to Aa3.

 

• Italy's new government won a crucial confidence vote, paving the way for sweeping austerity. However, Italian Prime Minister Mario Monti took a veiled swipe at German Chancellor Angela Merkel for the pound of flesh demanded in return for financial help. Monti said the sovereign debt solution "should be wrapped in a long-term sustainable approach, not just to feed short-term hunger for rigor in some countries," in reference to Germany's insistence on crippling austerity measures for big debtors.

 

• The Eurozone Trade surplus fell to €1.1bn in October from €3.1bn in the same period of last year, Eurostat said Friday.

 

• The US Dollar held its ground versus the euro on Friday, bouncing back from modest early losses after Fitch became the latest ratings agency to warn on some key European nations. EURUSD this morning was not far from Wednesday's 11 month low of $1.2944, currently $1.3010.

 

• US consumer prices held steady in November in news overshadowed by the Eurozone on Friday. The consumer price index for November was unchanged from October levels, which showed a 0.1% decline from September. Most economists had predicted a slight, 0.1% increase in the cost of consumer goods.

 

• The Reserve Bank of India on Friday opted to maintain its key rate unchanged, thus stalling a rate-tightening spree, in a bid to support the depreciating rupee. The central bank headed by Governor Duvvuri Subbarao maintained the repo, the rate at which it lends to banks, at 8.50% and the reverse repo, the rate at which the central bank borrows from banks, at 7.50%. Economists had anticipated the decision, as inflation has slowed and industrial production dropped for the first time in more than

two years.

 

• On Sunday night North Korea's state leader Kim Jong-Il passed  away after suffering a heart attack. The most exposed currency pair is USDJPY which rallied from 77.86 to 78.16 upon the news but didn't last long and retracted back below the 78 level. The US dollar was initially bought up on the political uncertainty.

 

DATA TO LOOK OUT FOR (all times GMT)

 

• At 3.30pm, ECB President Mario Draghi is speaking before the European's Parliament's Economic and Monetary Committee in Brussels

 

• GBP Consumer Confidence is out later today which is a leading indicator of consumer spending. The figure is expected to show a fall from 36 to 34 as conditions tighten up.

 

• Overnight in Australia we have the Monetary Policy Meeting minutes which shows a

detailed record of the Reserve Banks most recent meeting, Australia’s interest rate

was cut from 4.5% to 4.25% in the first back to back reduction since 2009.

Current Spot Rates (9.00am)

19th December 2011

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5512

1.1913

1.5590

1.6091

1.4542

8.8578

9.2612

12.0720

10.74

12.96

120.857

USD

 

0.7678

1.0050

1.03735

0.9375

5.7103

5.9703

7.78

6.92

8.35

77.912

EUR

1.3024

 

1.3087

1.3507

1.2207

7.4354

7.7740

10.13

9.02

10.88

101.450

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE UK

• Although data recorded a drop in UK retail sales of 0.4% in November, they posted a three month gain of 0.7%, the strongest such gain since August 2010. Across the day, GBP enjoyed a rally to a high of $1.5529 against the dollar belying the ongoing weakness perceived in the British economy.
• While private consumption continues to stall, the BoE will surely see a growing case for expansion of its monetary policy and the minutes of the most recent policy meeting, due out next week, suggest a growing pessimism regarding the economy, expectation for further QE will surely increase.
• Christian Noyer, head of Bank of France, caused a stir by claiming that the UK should have its credit rating cut from the prestigious AAA before France given the relative deficits, debt, inflation and growth.
• GBP/EUR fell from highs of 1.1939 to 1.1868 and back before consolidating between 1.1910 and 1.1920 where it seemed to settle throughout US and Asian trading. 

 

ELSEWHERE

 

• Despite the ECB’s monthly report insisting the euro is still under considerable pressure, Spain’s treasury sold €6bn medium and long term bonds, surpassing a target of €3.5bn while 5yr bonds were at an average yield of 4.02%, down sharply from 5.27% last month and 10 year bonds boasted a yield of 5.54% compared to 6.97% last month. Importantly, some consider the stark improvement an indication of ECB involvement in the secondary bond market and therefore somewhat artificial.
• SNB announced their decision to maintain a EUR/CHF floor at 1.2000 with ‘utmost determination’. The intention to maintain the peg which was established on September 6 saw the franc rise 1.2% against the euro to CHF 1.2229 – a six week high.
• This was compounded by the SNB also deciding to keep its key refinancing rate close to zero while Swiss industrial production data recorded a greater than expected decline in the third quarter.
• Manufacturing activity across the Eurozone posted a surprise increase for December although the figure, 46.9, is the fourth consecutive month where the published figure has come in at less than 50, which shows growth or contraction.
• Consumer price inflation remained unchanged at an annualised rate of 3%, in line with consensus.
• Further developments to the European crisis resolutions saw Russia commit EUR10B to the IMF but a dent to plans for longer-term refinancing operations came as bankers seem unlikely to buy more sovereign debt using the 3 year loans available from the ECB from next week
• EFSF have been accused, in some circles, of irresponsibility as the draft prospectus for the latest bailout instruments cites “Risks arising from a Reference Sovereign ceasing to use the euro as its lawful currency...or the cessation of the euro as a lawful currency” as part of four pages of potential risks.
• A short term correction in the major currencies saw the greenback cede gains, which reached as low as $1.2955 against the euro, as part of a rally which will hinge on Friday’s economic docket.
• Data could bolster the dollar with the headline reading for US inflation anticipated match the previous such release. Thursday’s Producer Price Inflation datum in the US matched expectation at a 0.3% rise. Such stubborn price growth and a steady increase in economic activity might hinder expectation for the FOMC to undertake another large scale asset purchase program.
• Thursday’s other data releases saw initial jobless claims fall to a three year low of 366k, according to the Department of Labor, despite predictions of a climb to 390k. The New York and Philly Fed indices of manufacturing conditions climbed to 9.5, a seven month high, and 10.3, double the expected figure, respectively. 

 

DATA TO LOOK OUT FOR (all times GMT)

 

• In a relatively quiet day for data, new ECB President Mario Draghi takes part in a panel discussion at the Banca d’Italia, in Rome.
• Eurozone Trade Balance data is released at 10.00.
• US Consumer Price Index is released at 1.30pm and expected to show inflation has remained at 3.5% annually.
• US Fed members Evans and Fisher are due to speak in Fiesole and Austin respectively this evening.

 

Have a great weekend.

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5528

1.1918

1.5548

1.6020

1.4583

8.8617

9.2878

12.0860

10.78

12.95

120.983

USD

 

0.7675

1.0013

1.0317

0.9391

5.7069

5.9813

7.78

6.94

8.34

77.913

EUR

1.3029

 

1.3046

1.3442

1.2236

7.4356

7.7931

10.14

9.05

10.87

101.513

 

Key Support and Resistance Levels

 

 

 

 

Support

 

Resistance

GBPUSD

1.5352

1.5391

1.5452

 

1.5552

1.5591

1.5632

GBPEUR

1.1801

1.1836

1.1876

 

1.1953

1.1989

1.2031

EURUSD

1.2870

1.2912

1.2966

 

1.3062

1.3104

1.3158

 

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE UK

 

• The pound had an impressive day against the euro progressively rising throughout the session, breaking through the €1.18 mark in the late afternoon and hitting a high of €1.1829 late in the US session, the highest since late February.
• GBPUSD saw a fall of around 0.6% to the day’s low of $1.5537 early in the session. The pound had a brief recovery peaking at a high of $1.5653 before settling down in the $1.5580 to $1.5600 range.
• British 10 year bond yields remained only 0.09% higher than the US T-bonds and just 0.04% above the German bund.
• The coalition government was fiercely split over David Cameron’s actions last week at the EU summit. Deputy Prime Minister and leader of the Lib Dems Nick Clegg was absent from yesterday’s parliamentary session.
• The PM maintained that he vetoed Britain’s acceptance to the terms presented in the summit because of ‘insufficient safeguards’. 
• This morning Core CPI figures show a decline, 3.2% from 3.4% last month and the more important measure of inflation, CPI fell to 4.8% from 5.0% month. Although still much higher than the target rate of 2.0% The Bank of England will be pleased to see the fall.

 

ELSEWHERE

 

• The euro suffered across the board as western markets digested the disappointment of last week’s EU summit which apparently did nothing to quell fears over the future of the trade zone.
• The disappointment was underlined through warnings issued by major ratings agencies to EU leaders that they had made insufficient ‘decisive policy measures to end the crisis and little to ease pressure’. 
• Moody’s added to the stresses on the Eurozone by adding eight of Spain’s banks and two Spanish holding companies on review for a possible credit rating downgrade. The ratings agency cited increased loss estimates from the commercial real estate market and weakening growth in the economy.
• Risk appetite took a hit as investors feared the worst and EUR/USD displayed a steady decline as investors. The pair opened at the session high of $1.3377 and closed at $1.3179, just off day lows of $1.3163.
• The USD’s performance was tracked closely by its fellow safe haven currency, JPY as expected under such risk driven market conditions. Both made significant gains against sterling in ahead of the European session in anticipation of the effect of Friday’s EU summit. The anxiety had subsided on both shores by 10am.
• Disappointing figures in the US Monthly Budget statement last night showed the excess of Federal outlays over receipts increased by almost $40bn from -$98.47bn to -$137.3bn
• Australia’s Trade Balance fell surprisingly to $1.595bn, well off the consensus of £2.0bn. Aussie Home Loans were up 0.7% against expectation of zero growth, GBPAUD reached a high of 1.5524 from a low of 1.5322.
• Japan’s Consumer Confidence figures for November were revealed lower than expected at 38.1, down from 38.6 the month before. Machine Tool Orders in November fell to 15.9% down from 26.0% the year before but in contrast, the Tertiary Industry index demonstrated a big boost in domestic services, up from -0.7% to 0.6%.
• This morning ZEW surveys in Germany and the Eurozone both show that Economic Sentiment has improved in December.

 

DATA TO LOOK OUT FOR (all times GMT) 

 

• Retail Sales figures are released at 1.00pm in the US, the markets are expected the results to remain similar to last month with Sales with Autos rising to 0.6% whilst the figure without falling to 0.5%.
• The US Fed Interest Rate Decision is a 7.15pm, it is highly unlikely there will be any change to the current 0.25% and therefore the results and accompanying report will have little effect on the markets.
• Overnight in Australia, Westpac Consumer Confidence figures are released for December, last month’ figure was 6.3%

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5583

1.1821

1.5448

1.6014

1.4600

8.7916

9.1085

12.1250

10.72

12.86

121.208

USD

 

0.7591

0.9913

1.0277

0.9369

5.6418

5.8452

7.78

6.88

8.25

77.782

EUR

1.3174

 

1.3068

1.3547

1.2351

7.4373

7.7054

10.26

9.07

10.88

102.536

 

Key Support and Resistance Levels

 

 

 

 

Support

 

Resistance

GBPUSD

1.5398

1.5466

1.5522

 

1.5646

1.5714

1.5770

GBPEUR

1.1592

1.1640

1.1737

 

1.1886

1.1937

1.2039

EURUSD

1.2877

1.3019

1.3093

 

1.3309

1.3451

1.3525

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE UK

 

• Britain was in the spot light on Friday as David Cameron didn’t agree to new fiscal terms at the EU summer saying he is safeguarding the UK’s banks and vowed to never join the euro. This has caused widespread disagreement within the coalition government. Nick Clegg believes the UK will be left behind and have less power with the Eurozone.
• Sterling showed little reaction to data showing record exports helped narrow Britain's trade deficit at its fastest pace since in October records began. October’s figure came in at £-7.557bn, significantly better than the previous months £-10.175BN, and much better than the consensus view £-9.500 Analysts said they remained concerned that Eurozone turmoil and weak demand at home would threaten an economic recovery in the UK.
• A choppy trading day on Friday saw GBPUSD with little change and closed of near $1.564. This morning we have seen it carry on down below the 23.6% Fibonacci retracement level of $1.5597 and currently trading at $1.5565 (December low) as investors look to at dollar as a safe haven.
• A report by the FSA says RBS gambled with its purchase of Dutch bank ABN Amro and was dragged to the brink of collapse three years ago by poor management decisions and flawed regulation and supervision.

 

ELSEWHERE

 

• Friday saw the euro swing euro back and forth after all EU nations except the UK and Hungary agreed to new fiscal ties at an emergency summit, the summit went a long way towards forging the closer economic ties needed to prevent future debt crises but markets are likely to judge it as too little and too late to solve the current one.
• EU leaders agreed stricter budget rules for the Eurozone but failed to secure changes to the EU treaty among all 27 member states. Countries also failed to reach an agreement on giving a banking license to the Eurozone's permanent bailout fund, limiting its firepower. They announced the possibility of increasing the size of the ESM above €500bn, this is due to be discussed further next March.
• The highlight for Germany was the announcement of no PSI in the ESM as a precondition, but adherence to the “well established IMF principles and practices”. Finally, discussion about an IMF provision of an additional €200b of resources is to be confirmed in the coming days.
• EURUSD initially strengthened on the news rising to $1.3425, however concerns that the agreement doesn't represent a solution to the debt crisis drove the euro back down to $1.335. Monday morning has seen the USD gains continue, current trading is $1.3307.
• Moody's downgraded its long term ratings on French banks with BNP Paribas, Credit Agricole and Societe General citing deteriorating macro fundamentals and funding issues.
• Canada recorded a surprise Trade balance deficit (-$885m vs. +vs. +$1b) in October, following a big month surprise surplus. The drop came mostly on the back of a -3% fall in exports (biggest decline in eight-months) and a +1.9% advance in imports.
• China revealed details to create Eurozone and US investment funds for a total of about $300bn. The aim is to help pump money into the Eurozone to boost returns on its foreign exchange reserves with aggressive high return investments.
• Inflation in China eased to its lowest in 14 months in November, providing ample room for the central bank to ease policies to support economic growth amid turbulence in Europe, China's biggest trading partner. Inflation eased to 4.2 percent in November from 5.5 percent in October, the National Bureau of Statistics said Friday. The rate cooled for a fourth consecutive month, after peaking at 6.5 percent in July.
• India’s industrial output shrank for the first time in 28 months, pushing stocks and the rupee lower on concern faltering growth will force the central bank to suspend its fight against the fastest inflation in BRIC nations.
• Foreign-exchange strategists are slashing their forecasts for the euro at the fastest pace this year as European Central Bank President Mario Draghi’s interest- rate cuts remove one of the currency’s pillars of support.

 

DATA TO LOOK OUT FOR (all times GMT)

 

• Markets will be waiting for further fallout from last week’s EU Summit in an otherwise fairly quiet day for data announcements.
• At 7.00pm the US monthly Budget Statement is released, the figure is expected to fall sharply to -$150bn as expenditure across Federal Entities, Disbursing Officers and Federal Reserve Banks out ways payments in.
• Japan’s Tertiary Industry Index for October is released overnight and is forecasted to show an marginal improvement.

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5588

1.1705

1.5356

1.5948

1.4443

8.7039

9.0243

12.1280

10.58

12.78

121.157

USD

 

0.7511

0.9851

1.0231

0.9265

5.5837

5.7893

7.78

6.79

8.20

77.725

EUR

1.3313

 

1.3119

1.3625

1.2339

7.4361

7.7098

10.36

9.04

10.92

103.509

 

Key Support and Resistance Levels

 

 

 

 

Support

 

Resistance

GBPUSD

1.5432

1.5506

1.5586

 

1.5740

1.5814

1.5894

GBPEUR

1.1609

1.1644

1.1677

 

1.1745

1.1781

1.1815

EURUSD

1.3142

1.3211

1.3297

 

1.3452

1.3452

1.3607

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.

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 income drawdown, flexible pensions or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension drawdown, 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, income drawdown now including flexible pensions, a QROPS and QNUPS (Qualifying non UK Pension schemes).

 

IN THE UK

 

• British Prime Minister David Cameron says that Britain will not ratify the Franco-German proposals to change the EU Treaty without safeguards for British interests and The City of London. 
• Following yesterday’s announcement that S&P have placed a further 15 of the 17 Eurozone states on a negative watch, including France and Germany, GBP/EUR moved to a rate of €1.1711. 
• In the lead up to the open of the European markets GBP/EUR trades at €1.1627 arguably on the back of support for planned changes to the EU Treaty for the United States.
• The British Retail Consortium indicate the early advent of sales on the British high street has contributed to a contraction in the pace of retail inflation.  Whilst Food price inflation remains on the up, other retail items saw a contraction by 0.1% to 2% for previous 2.1% posting.
• Josh Raymond of City Index asserts that major currency trading will remain largely headline driven until sentiment from Friday’s EU summit and minutes from BoE can be assessed fully.  GBP will benefit from a more or less coordinated effort to lower rates around the world coupled with protection of Britain’s AAA rating. 

 

ELSEWHERE

 

• The European Financial Stability Fund (EFSF) has also come under scrutiny from ratings agency Standard and Poor’s, who have warned that it could downgrade the AAA rating of the fund.
• Timothy Geithner, US Secretary of the Treasury, spoke yesterday of an emphasis on the importance of success in the EU talks, not only for the EU and US, but for the Global economy as a whole; overnight USD moved to a rate of $1.34 against EUR, but has slipped back to $1.343 following the European open.
• Analysts in Asia have warned of the immediate risk of contagion globally, and as a result many Asian economies have ‘trimmed’ their growth forecasts, but the area itself does see the potential for medium term growth on the back of an increase in demand with closure of a percentage of European export markets.
• Dutch heads of business have come out to urge EU political leaders to push forward urgently.  With over one third of their exports going to Southern European countries, fears voiced by The Netherlands place greater pressure on EU heads of state to satisfy the markets’ appetite for stability in the Eurozone.
• This morning the Secretary General of OPEC, speaking in Doha, said that he hoped the EU would not go ahead with a proposed ban on Iranian oil.  At present Iran supplies the EU with around 18% of its oil, or 450k barrels a day, and the Secretary General warns that this amount would be very hard to replace if sanctions come into place.
• Australia posts GDP figures in line with expectation at 1%, but below the 1.4% growth shown last quarter.  GBP/AUD moves from a rate of 1.5228 to 1.5182, and marginal risk appetite comes back to certain Far Eastern currencies; SGD strengthens against GBP slightly. 

 

DATA TO LOOK OUT FOR (all times GMT) 

 

• 11.00am German Industrial Production figures are released.
• MBA Mortgage Applications is released at 12.00pm in the US
• In New Zealand at 8.00pm, the RBNZ release their interest rate decision. The markets aren’t expecting any change to the current 2.5%
• Japanese Trade Balance is released overnight.

 

Current Spot Rates (9.00am)

 

 

 

 

 

 

 

 

 

USD

EUR

AUD

CAD

CHF

DKK

NOK

HKD

SEK

ZAR

JPY

GBP

1.5629

1.1640

1.5202

1.5763

1.4445

8.6552

8.9747

12.1480

10.51

12.52

121.471

USD

 

0.7448

0.9727

1.0086

0.9242

5.5379

5.7423

7.77

6.72

8.01

77.722

EUR

1.3427

 

1.3060

1.3542

1.2410

7.4357

7.7102

10.44

9.03

10.76

104.357

 

Key Support and Resistance Levels

 

 

 

 

Support

 

Resistance

GBPUSD

1.5443

1.5500

1.5550

 

1.5657

1.5714

1.5764

GBPEUR

1.1513

1.1567

1.1604

 

1.1696

1.1752

1.1790

EURUSD

1.3249

1.3290

1.3347

 

1.3445

1.3486

1.3543

 

Gerard Associates Ltd advises UK residents, expats and people considering living abroad on the technical and currency options available for Pensions, pension income drawdown, flexible 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.