Every weekend at the Current we wrap up the world’s biggest business stories. This week: the Fed finally raised interest rates, stock markets react positively, the loonie falls to new lows, the Pharma bro is arrested, the Argentine peso is down, more tension between Ukraine and Russia.
Fed Raises Rates (Finally)
In a widely anticipated move the US Federal Reserve raised interest rates for the first time in nearly 10 years. Many economists had predicted that rates would be raised much earlier in the year but uncertainty in China and Europe forced the bank to delay the decision. After years of near-zero rates, the Fed has increased its benchmark range to between 0.25% and 0.5% as part of a gradual process to bring rates back up to a normal level.
Stock markets react positively
Following the Fed’s announcement, the Frankfurt Dax rose 3%, London’s FTSE 100 rose 1.1%, the Dow Jones was up 1.3% and the Cac 40 in Paris was up 2.1%. The USD also gained ¾ of a cent against the British pound sterling.
The Canadian dollar slumped further to below 71.57 cents US for the first time since 2004. The Fed’s rise in oil prices, and the continued depressed price of oil have both contributed to the low value of the loonie.
Don’t Tase me Bro
Martin Shkreli, the so called “pharma-bro” whose company raised the price of a lifesaving medicine by 5 000% has been arrested for fraud. The charges stem from Shkreli’s tenure as head of a drug firm Retrophin and a hedge fund he where he was a manager – MSMB Capital. Retrophin has also launched a separate lawsuit against Shkreli for misuse of company funds.
Argentine Peso is down
The Argentine peso nosedived 30% following the removal of currency controls. Argentina’s Finance Minister Alfonso Prat-Gay eliminated foreign exchange restrictions that have been in place since 2011. The move will allow easier access to US dollars, but could also raise prices on consumer goods, and devalue the peso further.
Breaking: Ukraine and Russia not friends
Beginning January 1, Ukraine will be excluded from a Russian dominated free trade zone that includes former Soviet countries. Ukraine is due to join the EU free trade zone on January 1. Putin signed the decree in order to protect Russia and other members of the pact from European imports. It is the latest move in a long standing period of hostility between Russia and Ukraine.
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