Worry for exporters as euro gains ground against sterling
Sterling fell to its weakest level against the euro in over five months yesterday - bad news for Irish exporters - as Britain's inflation rate turned negative for the second time this year, matching the lowest level since 1960.
Official figures showed that inflation dipped to -0.1pc, which analysts argue will ease pressure on the Bank of England to hike interest rates. The pound hit 74.72 pence against the euro yesterday morning, the weakest since May 7. By early afternoon, it moved close to 75p.
John Moclair, head of retail treasury sales at Bank of Ireland, said Irish-based businesses selling into the UK market will be keeping a close eye on developments.
"Despite on-going equity market jitters and the focus on the recent Federal Reserve decision, the euro has been relatively calm against the dollar and sterling," Mr Moclair told the Irish Independent.
"However, there were some signs early yesterday morning that this might be about to change for euro/GBP, which moved up close to the 74.75p level area.
This is the strongest the euro has been against sterling since May and brought the euro close to highs not seen since February.
"Irish exporters to the UK and other sterling sellers will be monitoring events closely as sustained moves above current levels would strongly suggest that the benign currency environment that they have enjoyed so far in 2015 may be coming to an end for a period."