FED CUT SENDS RIPPLES ROUND WORLD - A quarter percentage point cut in US interest rates and is having an impact around the world against a backdrop of very high oil prices.
Dr Dan McLaughlin, the chief economist of Bank of Ireland, said the US economy was growing slowly, and there was a fear that the country's housing downturn could tip into a wider recession. This is putting pressure on the dollar.
Dr McLaughlin said a weaker dollar often led to a rise in commodities priced in dollars, such as oil. But he said there was a lot of speculative buying of oil, and this could reverse fairly quickly. The economist pointed out that petrol consumption had actually been flat in the US over the past year.
He said that while a weak dollar was bad for Irish exports, it was also cheaper for Irish people to buy US assets such as equities and property, but he warned that it would be 'very brave' for people to buy US property yet. Dr McLaughlin pointed out the Federal Reserve expected the US housing market to weaken well into 2008.
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NEWS IN BRIEF AND CURRENCIES - A single electricity market covering the whole island of Ireland came into effect today jointly operated by Eirgrid and its equivalent company in the North.
Meanwhile a 5.4% reduction in ESB billing costs for homes comes into effect today.
The euro is worth $1.4465 and 69.57p sterling.
