Consumer Lack Confidence Pound Loses Position Against Eur

By Author: russelmori
Total Articles: 25
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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 pensionsor 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).

As the media world turned its focus to the parliamentary committee meeting featuring the embattledMurdochs, the markets continued to reflect the lack of consumer confidence that has animated European markets. Germany released her ZEW figures which indicated that confidence had dropped considerably from a negative 5.9 to negative 7.0 (but this was below the negative 7.4 forecast), leading pundits to question how secure the recovery is. ...
... It bears remembering that the German
economy, or rather Germany, is heavily indebted, so one must watch closely for the strength of Thursday’s European economic data.

On-going issues with regards to the budget agreements in the United States has done little to improve the fortunes of the dollar. Sterling closed the European session at 1.6141, and EUR/USD was just down at 1.4162. The question is whether the battle within congress over the US debt ceiling results in a risk on demeanour coming to the market, or whether
currencies like the Swiss Franc and the Japanese Yen will continue to enjoy their status as qualified safe havens versus the green back. One might argue that the pound has in fact reached the peak of its limit within this range, but this will depend on the strength of the retail sales data that becomes available later in the week.

European leaders will try to renew their strategy against the debt crisis this week. ECB President Trichet is expected to confirm his opposition to the Greek restructuring. German Chancellor Angela Merkel has stated that she feels both bond holders and the ECB must participate to support Greece. Portugal has shown the market that it is prepared to move forward with other adjustment plans. The Portuguese Prime Minister has announced that the government will be presenting new austerity measures before the end of August, which may bring an air of stability to the latter weeks of summer.

IN THE UK
• The eyes of the world’s media focused on London as News Corps Executives face questions from a parliamentary committee.
• The pound loses its position against EUR slipping from a healthy 1.14 down to 1.1370 for the majority of the day’s trading.
• The morning began with London Stocks improving slightly.
• The odds of David Cameron resigning over the embarrassment of the News of the World suggestions have narrowed greatly from 100/1 to 20/1.
• Banks are attempting to energize the mortgage sector with Barclays introducing the cheapest mortgage deal in 15 years. Conversely, first time buyers and developers are being advised to wait before purchasing. Money Weeksuggests that those purchasing residential property should wait for the Royal Assent to the Finance Act 2011 because of implicit savings in Stamp Duty.

ELSEWHERE
• German ZEW survey shows that investor confidence drops in July, and that the economic outlook worsens.
• Spain’s Treasury issues €4.45bn in debt auction. These 12 and 18 months notes were issued with a yield of 3.76% compared to the previous 2.728%.
• Investor confidence in Germany was shown to have dropped to negative 15.1. Sovereign debt issues in the EU and the United States debt ceiling concerns have served to dampened sentiment and can be identified as the key causes for the survey to miss it’s 11.8 forecast.
• The DAX index has fallen nearly 1.8% over the course of the past 12 months, and this did stabilise a touch over the last twenty four hours.

DATA TO LOOK OUT FOR
• Further assessment of the EU consumer confidence at 14:00 gmt
• MPC minutes will be released. These should confirm the ration in favour or again increase of the asset purchasing facility.
• Thursday presents extensive manufacturing and services date for key European economies
• The UK releases public sector net borrowing and retail sales figures. Retail figures should come through showing growth of 0.5, up significantly on last month’s poor figures of negative 1.4%.
• The US Federal Reserve Chairman will speak at approximately 14:00 on Thursday. This will be complimented by both manufacturing and unemployment data.

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.

Russel Mori writes for Gerard Associates LTD, for more information on QROPS, QROPS Pensions, QROPS List, QROPS Providers, QROPS Guernsey info available online.