SHORT BAN LEADS TO LONG FACES IN MARKETS - The euro fell to its lowest level in more than four years against the dollar after a German ban on risky bets on bonds, stocks and credit protection came into effect from midnight.
Germany banned some short selling to fight financial speculation which it blames for much of Europe's debt crisis. The ban relates mostly to the country's top ten financial institutions. Overnight the euro fell below $1.22 for the first time since April 2006.
James Hughes of CMC Markets in London explains that short selling is when people borrow shares or other assets in order to sell them on. They then plan to return them and keep the difference in price. 'Naked' short-selling is selling shares without having first borrowed the shares.
Mr Hughes said a previous ban on short-selling in the UK and US did not really work, and only caused more negativity in the market. He said much short selling was not done in Germany, and the measure would be difficult in police. Mr Hughes said he expected stock markets to take a battering later today.
The euro has fallen 15% against the dollar so far this year, hit by concerns that Europe's debt problems and austerity measures could hamper the euro zone's economic recovery.
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NEWS IN BRIEF - US computer giant Hewlett-Packard, which employs around 4,000 people in Ireland, has reported better than expected quarterly results as technology spending revived across all markets. The world's largest personal computer maker reported a second-quarter net profit of $2.2 billion, compared with $1.7 billion a year ago.
*** Financial services group IFG says its performance in the first four months of this year has been in line with expectations despite what it calls 'unstable' markets. The group is mainly involved in providing financial advice and services to individuals and companies. In a trading update, IFG said there were signs of a pick-up in activity in its international business, and it was confident it would return to normal growth levels next year.
