Global Watch

The Federal Reserve left interest rates unchanged and set the stage for future increases by dropping its long-held recession warning, saying the US economy was growing at a "significant pace." The federal funds rate remained at a 40-year low of 1.75 per cent.

The US said it would negotiate on Japan's request to be compensated for the losses produced by US tariffs on steel imports, opening the door to talks that could help defuse the increasingly volatile trade dispute.

Oil prices fell a touch after a brief spike to six-month highs. Benchmark Brent crude stood 11 cents lower at $24.55 on Thursday in London. Production cutbacks, the US-Iraq confrontation and the improving US economy are the factors underpinning the market.

Senior executives from 13 Asian units of Andersen have backed a proposed merger with rival KPMG in the region after a two-day conference in Singapore ended last week.

France Telecom paid the price for quickfire dealmaking at the height of the recent stock market bubble as an exceptional write-off of $9.2 billion pushed it into the red last year. The French group also showed modest progress in reducing its debt pile.

ABB, the debt-laden Swiss-Swedish engineering group, is likely to come under growing pressure to renegotiate its short-term borrowings following a downgrade by Moody's. The ratings agency maintained its negative outlook, which indicates that ABB's rating could be lowered further.