Stronger euro putting pressure on exporters
Published 23/09/2010 | 05:00
THERE was bad news for exporters to Ireland's two biggest markets yesterday as the euro rose against both the dollar and the pound.
The dollar slid below $1.34 against the euro -- its lowest level since April -- on worries that the Federal Reserve would ease monetary policy further.
The pound, meanwhile, weakened to 85.43p to the euro on the belief that the Bank of England was likely to follow US policy and also engage in so-called quantitative easing.
The greenback slid after US policymakers said on Tuesday evening that they "will provide additional accommodation if needed" to spur growth.
The yen strengthened for a third day to levels that may trigger more selling by the Japanese government.
The Bank of England signalled yesterday that its policymakers were moving closer to adding more stimulus to the economy, joining the Fed in contemplating further bond purchases to revive a flagging recovery.
"The Bank of England and the Fed have been closely related in their policy response, so the market is now speculating as to whether they will do further quantitative easing," said Mohit Kumar, a fixed-income strategist at Deutsche Bank in London.