Tag Archives: Slow

Forex Trading Articles

Sterling Suffers- GDP Data Shows US Economy Growing Slow

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 or QROPS (Qualifying Recognised Overseas Pension Scheme) should be considered to maximise the Pension, 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, QROPS and now QNUPS (Qualifying non UK Pension schemes). Sterling suffered a blow in Friday’s trading as the UK released the revised GDP figures for Q4 of 2010. It showed the UK economy contracted by more than first thought in the last three months of 2010, the figure came in at -0.6% against the preliminary reading of -0.5%.

It goes some way to reduce expectations of an interest rate rise by mid-year and highlights concerns about how the economy will deal with the pressure of rising inflation. Sterling fell to a three week low of E1.1640 against the euro from the earlier high of E1.1706. Against the dollar sterling hit a low of $1.6033 down over a cent from the high of $1.6160. Rate rise speculation has been rife over the last few weeks and has prompted a pile up in long positions that we will see sterling rise, analysts are now stating this weak data will prompt investors to cut these positions. “The market is long good news, and if they don’t get the good news sterling … is really at risk of a correction, and I think we’re seeing that correction now,” said currency strategist at UBS. Sterling was bolstered by the release of the Bank of England minutes on Wednesday which showed one more policy member had joined the hawk rank by voting for a rate rise. Increased bullishness among policymakers has supported the pound; some traders argue that the Bank of England’s stance may change when arch-hawk Andrew Sentance leaves the MPC in May.

Vicky Pryce, one of the candidates to succeed him has pointed out the risks of raising rates too soon in a newspaper column last week. After the minutes were released sterling seemed unable to hold on to the gains it achieved. Elsewhere the euro was given a boost through-out last week’s trading after European Central Bank policy member Axel Weber stated on Thursday that the only direction the euro zone rates were going was up. Overall last week the single currency gained 2% over the week, its best performance since late October. The US released GDP data on Friday which showed the US economy grew slower than first estimated in the fourth quarter of last year. It expanded at a 2.8% annual rate compared with earlier estimates of 3.2%. The US also released consumer confidence for February which rose more than forecasts this month, it increased to 77.5 from 74.2 last month. 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 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.

Market Analysis

China Gray-Market Cell Phone Shipments Slow in 2011

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Stymied by a government crackdown, China’s gray-market cell phone shipments are expected to expand in 2011 at a considerably slower pace compared to this year, according to the market research firm iSuppli, now part of IHS Inc. (NYSE: IHS). China’s gray-market cell phone shipments will amount to 255 million units in 2011, up 11.8 percent from 228 million in 2010. This compares to a rise of 43.6 percent in 2009. Gray-market handsets are cell phones manufactured in China that are not recognized or licensed by government regulators. Makers of these products generally do not pay China’s value-added taxes and, therefore, profit illegally from their participation in the market. “The object of a nationwide government crackdown, the gray cell phone market in the world’s most populous country is facing some trepidation as official scrutiny focused on illegal handsets and as consumers are starting to lose some interest in the devices,” said Kevin Wang, Director (China Research) at iSuppli. “This created particular challenges for white-box handsets-on which gray-market dealers can put their logos.

These types of phones use smuggled chips, carry no certification from China’s Ministry of Industry and Information Technology, sport fake international mobile equipment identity codes and are smuggled to Hong Kong to avoid value-added taxes.” What growth there is in 2011 will be driven by demand from emerging countries as well as by falling average selling prices for gray handsets. After growing in 2011, the gray market will begin to decline in 2012. This is because gray market cell phone suppliers will be unable to cut prices any further-even if they wish to win more new customers in emerging countries. Suppliers also will find themselves competing with an increasing number of locally branded original equipment manufacturers (OEMs) that provide better quality and after-sales service, iSuppli believes.

The market for gray handsets Aside from serving domestic demand in China, gray handsets command sizable sales in other countries in the Asia-Pacific region, an area that includes Thailand, Vietnam, Indonesia and the Philippines-as well as Pakistan, a neighbor to China. And while gray-handset shipments in 2010 within China will fall to 24.2 million units, down from 33.2 million in 2009, gray-handset shipments to other Asian countries during the same period will rise to 154.4 million units, up from 110.2 million. The market for non-gray handsets Meanwhile, shipments from Chinese non-gray handset makers will grow by 36.4 percent in 2010 and continue to climb during the next five years. Not only will Chinese OEMs improve their global market sales-especially in the emerging countries-China’s white-box handset shipments also will keep growing. Furthermore, Chinese handset makers will win more orders from international carriers and from locally branded OEMs in the emerging markets. Within the domestic market, China’s 3G handsets are poised for dramatic expansion-reaching 51 million units in 2010 and maintaining growth in the next five years, thanks to the continued decline of both 3G handset prices and service fees. By 2014, local 3G handsets are projected to reach 134 million units.