Morning business news - 29 August

Friday 30 August 2013 10.27
Morning business news - 29 August
Morning business news - 29 August

The Indian rupee recovered somewhat overnight after taking something of a hammering over the past few days and hitting a record low yesterday.

Emerging market currencies in general have come under pressure for the past while.

Peter O'Flanagan, Head of Trading with Clear Currency in London said the currencies have been under pressure since May when the US Fed signalled that it was going to cut back on stimulus.

"The emerging markets were benefactors of loose stimulus policy, with investors looking for a high yield. The reduction of stimulus now will put them under pressure. And they already have their own problems, especially India, where record deficits and a volatile currency are causing problems."

Peter O'Flanagan said the overnight reprieve in emerging currencies was likely to be short-lived.

"We saw India announcing that it was going to sell US dollars to refineries. That's a short term fix. The deficit in India doesn't encourage markets and they are continuing to spend recklessly which doesn't give markets confidence," he said.

Commodities like gold and oil are the benefactors of the recent upheaval.

"Stocks have been falling with the threat of military action in Syria. US dollar and Japanese yen has been benefiting. Gold is up over 20% after hitting recent lows."

Peter O'Flanagan pointed out that the strength in the Japanese yen isn't going to help Shinzo Abe's stimulus plans, which are based around devaluation of the yen.

"Abenomics is a long term plan. We're going to see Japanese policy in action for the next two to three years. It is a stumbling block but it's going to continue," he concluded.

***

Passenger and freight ferry company Irish Continental Group has reported basic earnings per share up nearly 20% to 16.4 cent for the half year to end June.

Revenue was up over 3% to almost €121 million with pretax profits of €3.3 million.

The company recorded good growth in freight volumes but passenger and car numbers were less buoyant.

***

Strong economic data from the US today could strengthen the hand of the Federal Reserve in regards to its tapering of the economic stimulus.

Second-quarter US growth numbers are expected to be revised upwards to 2.2% from an initial estimate of 1.7%.

That's mainly down to strong exports and weekly jobs claims are expected to fall also.

***

Dutch Multinational Furgo NV is to open a photonics global research centre in Dublin.

It's spent the past two years building up the R&D facility at Park West where it employs 26 people.

It's hoped the workforce will double as it rolls out its first products.

Photonics is the study of light generation, detecting and sensing.

This company develops photonic technology for sensing and measurement applications and solutions in the energy infrastructure and transport industries.

The project is being supported by the IDA.