NO END TO CURRENCY WARS IN SIGHT AFTER WEAK DEALS AT G20 TALKS - The G20 talks last weekend in South Korea took place against a backdrop of strains in financial markets which some consider a currency war. For the most part, the tensions were blamed on the US and China, with pressure on China to end its policy of holding its yuan down to maintain its competitiveness. No timetable for change was agreed at the weekend, and Beijing has kept to its long-held position that it will reform its currency policy gradually. In the US, low interest rates and other central bank policies have led many investors to seek higher returns in developing countries, which tends to push their currencies higher, undermining competitiveness.
Dave Kansas, European Markets editor at the Wall Street Journal in London, says that the G20 meeting in South Korea did not achieve a huge amount despite the high expectations. He says that despite some talks about the currency wars, the strength of any agreements reached was 'pretty weak'. In the future months, he says that the planned quantitative easing in the US will keep pressure on the dollar downwards, while the austerity moves in Europe will put pressure on the euro upwards.
Mr Kansas says that the IMF is constrained in the currency area. He says it is trying to referee the growing number of countries concerned about what the weak dollar is doing to their exports but its role is not really equipped for this.
Canada currently has the presidency of the G20 and it will continue to focus on the currency and trade tensions between the US and China. France is due to take over next year and Mr Kansas says this will change the focus as it is expected to concentrate on the weak dollar. He says this could add tension between the euro zone and the US.
*** MORNING BRIEFS - Swiss bank UBS today posted a third quarter net profit of 1.66 billion Swiss francs, exceeding analysts' forecasts as it restored client cashflow for the first time since the financial crisis. The net profit attributable to shareholders, equivalent to €1.22 billion, compared with a 564 million franc loss during the same time last year.
*** German consumers are at their most bullish for three years, a survey suggested today, as Europe's top economy steams ahead and unemployment remains relatively low. The index for November, drawn up by the GfK market research group, stabilised at 4.9 points, the same level as in October.
*** A new report claims that small businesses in Ireland lose over €563m a year through absenteeism. The report from the Small Firms Association says that total of 3.9 million sick days were taken last year at small businesses. The SFA's report also shows that workers in small companies are less likely to miss work through illness than their counterparts in bigger firms - the average is five days at small firms and ten at big ones.
*** Oil and gas firm Providence Resources has been offered a petrol exploration licence over Northern Ireland's Rathlin Island, by the Department of Enterprise, Trade and Investment. The initial licence term is for five years with a decision on a well commitment required within three years. Some oil was recovered there oil during testing and it is the company's first exploration licence in Northern Ireland.
*** Figures from business information firm Vision Net show that Irish firms which have gone out of business this year have unpaid debts of €1.1 billion. The figures show that 1,461 companies have been liquidated this year, 33 have gone into examinership and over 300 have been taken over by their banks.
*** Top bankers in Germany, including Deutsche Bank chief Josef Ackermann, have warned that politicians are putting the competitiveness of the country's banks at risk with too many rules. The German financial sector 'has reached its limits', Mr Ackermann and other bankers said in an attack on politicians in Germany, where decisions are usually reached with strong consensus.
*** On the currency markets this morning the euro is trading at $1.3973 cents and 88.53 pence sterling.
