The whole debate about whether the pound will hit parity with the euro is swirling ever more. Headlines abound on the subject - “Sterling treads water against euro”, “Sterling now a danger for exporters” in Irish papers - and in the English press - “Be careful what you wish for in cheering on sterling's slump”. Also there have been many headlines bemoaning the extremely poor exchange rates faced by UK travellers abroad in the euro zone. Urgent response needed for beef and mushroom farmers is the online Agriland’s take on it.

“Urgent government action is needed to counteract the serious damage being done to farming enterprises in the beef and mushroom sectors at present.

This is the opinion of IFA (Irish Farmers’ Association) President Joe Healy, following the recent nosedive in valuation of the sterling currency.”

A survey by Bord Bia earlier this year  showed that 39 per cent of exporters to the UK found a rate of more than 89p to the euro would cause severe difficulties and that a rate of more that 94p would cause big problems for a further 41 per cent. Hence we are close to the exchange rate being extremely problematic for at least 8 out of 10 food exporters to the UK.

So will the pound hit parity with the euro?  Even though it is impossible to be certain about anything on the currency front these days, there is some sentiment out there on the money markets that the pound should stabilise in and around the €1.10 mark. Reasons given for that include that money markets have already factored in many of the down sides against the pound.

Although the transitional space between now and the implementation of Brexit has not been factored in, because the shape of the Brexit is as yet unknown - money markets have factored in risk, and possibly too much so according to some.

The scale of the fall in the pound is starting to look excessive relative to the near-term political risks. Also some models show that sterling is already 20 per cent undervalued compared with the economic fundamentals - thus making any further fall in the pound look more unlikely.

However even factors as seemingly remote as North Korea have had an impact on the buying and selling of pounds on the FX markets The single currency is regarded as more of a safe haven if conflict emerges across the Pacific, unthinkable as that is.

The expectation in the market at the moment with respect to the Brexit negotiations is generally that agreement for a transition arrangement will most likely be met, and negotiations will move toward that end.  However no-one can predict exactly how things will pan out in the longer run. There is also expected to be a lot of squabbling and even brinkmanship, before a more finalised deal is hammered out, probably nearing the deadline for the talks to finish up.

As the IFA President said just recently, “Government cannot afford to wait any longer to provide direct support for beef farmers and mushroom growers who are being impacted today by the sterling depreciation. Unless action is taken promptly, irreparable damage may be caused to the viability of beef farmers and mushroom producers”.

Irish government budgetary considerations are also being impacted by currency fluctuations.

It is certain that we are in a period of flux and volatility which is impossible to avoid, and further swings in currency fortunes are to be expected.

Hedging against these  dramatic movements is increasingly impossible the longer that they continue It becomes more and more problematic to get hedging and other protection at a reasonable rate.

Although the sterling rate  poses the starkest threat to business at the moment, with customs and tariffs headaches potentially further down the road, the Irish government is  already believed to be talking with Brussels about clearance unders state-aid rules for further supports like greater availability grant-aid investment to support productivity.

History would suggest that the UK economy possesses underlying strengths that are unlikely to be neutered completely by the current challenges facing it, hence the pound should bear up eventually to the currency market battering.

In the meantime though the damage to Irish ( and other eurozone) exporters is being done.