Australian resource companies will benefit from China’s decision
last night to revalue its currency, the yuan, against
the US dollar, reports The Smage.
China revalued the yuan by 2.1% against the US dollar and
switched to a managed float against a basket of currencies, abandoning
the US dollar peg it has maintained for a decade, reports the Fin Review. The revaluation is a further boost for
Australia’s mining sector, reports The Australian. It will increase the value of the yuan, making imports into
China of Australian iron ore, coal and metals cheaper for Chinese
importers, which should boost demand.

The Australian

reports that Telstra’s $335 million a year marketing spend
has been thrown wide open with new chief executive Sol Trujillo calling
a summit of the company’s advertising agencies to fix its image with
customers and help stem continuing market-share losses. Also in The Oz, the Commonwealth Bank is understood to have
sacked its entire marketing communications team, outsourcing the work
of up to 15 people to John Singleton’s STW Communications group.

The Age
reports that many companies are overestimating the savings from
outsourcing – which can involve shifting jobs offshore – while
underestimating the task of managing outsourced contracts. A report by
global professional services company Deloitte, to be
released next week, highlights the risks associated with the
increasingly widespread practice. It finds that even global
companies hold unrealistic expectations of the cost savings that
can be generated.

Major companies, state governments and senior judges are ramping up the
pressure on law firms to settle legal cases out of court, as the number
of commercial disputes going to trial in Australia drops significantly,
reports the AFR. Expensive legal bills, the risk of adverse
publicity and the distraction of having executives forced to give
evidence in court have prompted many companies to demand their lawyers
settle disputes out of court.

And The SMH reports that a company owned by Kerry Stokes’s Seven Network has been named
on an Australian Crime Commission summons in relation to the
country’s biggest tax evasion investigation, leaving Seven
professing itself “bemused.”

On Wall Street, US stocks closed decisively lower overnight,
after a session made frenetic by new incidents in the London underground and
China’s surprise decision to revalue the yuan. The Dow Jones Industrial
Average closed down 61.4 points at 10,627 – MarketWatch has a full
report here.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey