Central Banks in Action
The euro lost out against the dollar for the first time this week today due to the European Central Bank’s programme of buying government bonds being put on ice while the German courts come to a decision on the funds set aside for European bailouts.
In a day that was full of action from officials and central banks German Chancellor Angela Merkel said she felt it was in everyone’s best interests to keep Greece in the Eurozone and that she and the German Government will assist the Greeks as they embark on the long journey to recovery. Merkel met with Greek Prime Minister Antonis Samaras today in Berlin for crunch talks in which Greece was expected to request more time to hit the their economic goals as part of their bailout agreement. The US central bank, the Federal Reserve, said in an open letter that it felt there could be “scope for further action” as it was pushed to defend its quantitative easing policy. The Reserve Bank in Australia could not resist getting involved either, as they confirmed that the Aussie would be likely to fall drastically should an end come to the current mining boom.
With miners currently facing the problem of increasing costs and decreasing product value the entire industry is in trouble, with BHP Billington being a recent example. The worlds largest mining company’s profits fell by 35% year on year earlier this week. They claimed the losses were due to falling commodities prices, devaluing their product and forcing them to sell assets.
Elsewhere HSBC has entered talks with US regulators with the view of agreeing a settlement over the allegations of money laundering that were brought against the bank earlier years. The bank have set aside $700 million as the settlement figure is expected to be the highest ever paid, smashing ING Groep NV’s $619 million.