We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory.  In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.

Sterling hit a near 7 month low of euro1.1188 yesterday over the on-going concerns the Bank of England will need to pump extra money into the economy in the form of quantitative easing. Investors eagerly await the release of the UK's third quarter GDP figures due today at 9:30am with expectations the UK economy expanded by 0.4% which is only a third of the 1.2% growth recorded in Q2. It must be noted that a weak figure will increase the chances the BoE will opt for a new bout of QE at their next meeting in November which previously has considerably weakened sterling's value.

The pound's next key support level is at euro1.1111 (£0.9000) if it falls through this level traders feel we could see the rate drop to the early year lows of euro1.0928

The pounds losses against the euro pushed sterling's trade weighted index down to 78.3, its lowest level since late May and within close reach of the May low of 77.8.

Yet sterling managed to make gains against a broadly weaker dollar ahead of the Fed's meeting next week. Investors saw a group 20 agreement to shun competitive currency devaluations to increase exports as a go ahead to sell off the greenback with many economists believing we will see the Fed increase their asset buying to help an already struggling economy. The next question will be whether the Bank of England follows Americas lead, which is resulting with the pound underperforming against majority of the other currencies, especially after the BoE minutes last week showed one policymaker, Adam Posen vote for an extension of QE by £50 billion.

"The market is gunning for the dollar going into the Fed meeting, but it's not all good for sterling and the easiest way to express a bearish view on sterling is against the euro," said Paul Mackel, currency strategist at HSBC.

"The GDP data is the main focus for sterling this week and if it disappoints the market will factor in a higher probability of more QE".

Sterling reached a day's high of $ 1.5771 up from the earlier session low of $ 1.5661.

The US saw better then expected home sales in September which rose by 10%, this is the 2nd month in a row the US has seen an increase to this figure yet it overall is still down -19% against sales recorded a year ago, but it does go some way to show the sector may be stabilising.

Reports circulating yesterday showed foreign-exchange strategists stating the worst may still be yet to come for the pound which has depreciated over 5% against nine other most traded currencies since July. This is mainly due to the new coalition governments spending cuts which will hamper growth moving forward.

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier' climates. This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.

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

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