What moved this week and what it means for expats in SE Asia
Markets, currencies, and macro events filtered through one lens: what does it mean for a European professional living in Malaysia, Singapore, or Thailand with assets spread across multiple jurisdictions?
The UK Budget left pensions alone and the Fed held, then weak tech results hit shares and gold fell to a one-year low
The two events set for Wednesday 28 October, the Fed decision and the UK Budget, passed without a shock. The Federal Reserve held its rate at 3.75% to 4.00%, though two of its twelve voters wanted a rise. It said inflation "remains elevated", and markets still expect a rise in December. On Friday, weak results from Alphabet, Amazon and Intel revived doubts about spending on artificial intelligence, and the S&P 500 fell 1.8%, its worst day since June. It ended the week down 0.6%, and the Nasdaq fell 2.0%. Japan's Nikkei and Hong Kong's Hang Seng both finished the week slightly higher.
Gold fell 3.0% to $3,876 an ounce, its lowest level in a year. Dearer oil and firm US inflation point to interest rates staying high, and gold pays no interest. Brent crude ended the week at about $113 a barrel on the January contract. Last week's $116.72 was the December contract, which expired on Friday. Like for like, the price rose 1.6%, and it gained more than 15% over October. Iran said several tankers struck mines in the Strait of Hormuz on Friday, a claim that has not been independently confirmed. On Saturday Saudi air defences shot down a drone over Riyadh. Reports say Israel's prime minister is pressing for strikes on Iran after the US midterm elections on Tuesday 3 November. Washington says no decision has been made.
In the Budget, the tax-free lump sum stays capped at £268,275 and the annual allowance at £60,000. Tax relief on contributions is unchanged, so weeks of speculation came to nothing. The state pension will rise 3.9% next April, to £250.70 a week. Tax on savings and on rental income from property in England, Wales and Northern Ireland will rise to 24%, 44% and 49% from April 2027, a rise that reaches anyone letting out a UK home while living abroad. Income tax thresholds stay frozen until April 2031. Gilt yields fell after the Budget, and the ten-year closed the week at 5.29%. Markets expect the Bank of England to raise rates on Thursday 5 November.
The ringgit strengthened 0.7% against the dollar to 4.06, its first weekly move outside a narrow band that had held for seven weeks. Bank Negara's own rate confirms the move. The euro fell 0.9% against the ringgit and is now about 3.9% weaker than in mid-September. Bank Negara and the Bank of England both set rates on Thursday. Israel's election left neither side with a majority, and official results are due on Wednesday.
Currency rates relevant to European expats in SE Asia
As at Friday 30 October. Rates are indicative. Source: European Central Bank reference rates.
Currency context for this week
Sterling rose against the dollar for a fourth week, to 1.3399, and gained on the euro for a fifth. Against the currencies our clients spend in it was mostly steady, up 0.2% on the Singapore dollar and the Thai baht. The euro fell 0.2% against the dollar to 1.1172. The European Central Bank held its rates, and Christine Lagarde will step down as its president in February 2027, earlier than planned.
The ringgit rose 0.7% against the dollar this week, so both European currencies lost ground against it: sterling 0.5% and the euro 0.9%. A euro now buys about 3.9% fewer ringgit than it did on 11 September. A Dutch or German professional paying rent and school fees in Kuala Lumpur has absorbed that loss a little at a time, with no single headline to mark it. Holding the next twelve months of ringgit costs in ringgit takes the exchange rate out of the household budget.
What this week's moves mean for your portfolio
Gold is now at its lowest in a year, about 31% below its January high, while the conflict around the Gulf has widened. Anyone who bought it as insurance against this war has watched the war intensify and the insurance lose value. This year gold has followed interest rates and the dollar, and markets now expect US rates to rise again in December.
Bond yields fell as money left technology shares. The US ten-year Treasury yield ended at 4.93%, a seven-week low, and the UK ten-year gilt fell to 5.29%. Lower gilt yields lift defined benefit transfer values a little. Yields are still close to their highest since 2007, though, and a Bank of England rise on Thursday could reverse the move. Anyone weighing a transfer should decide on their own circumstances and on current figures.
Tuesday brings the US midterm elections, and some reports tie the timing of strikes on Iran to them. A portfolio should be built to hold through a date everyone can see coming. If an election makes you want to sell, the risk level is the thing to fix. The long-term core belongs in Irish-domiciled accumulating UCITS funds, spread across markets and held in the currency it will be spent in.
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