Sterling was trading at 92p to the euro just before mid-August. Although there was a bounce back we are well in the red zone as far as Irish exporters to the UK are concerned. The expectation at this point in time is that sterling will continue to fall and be tested by the markets.
The Central Bank in Ireland believes that the possibility of a hard Brexit is not yet fully priced into the value of the pound. Even with the new P.M. Boris Johnson saying the possibility of a no deal exit is vanishingly small, the markets seem to be thinking otherwise.
The currency is the bellwether of minute by minute market analyst thinking - so watching this metric gives some indication of where we are all headed.
With some recent remarks by the German Chancellor Angela Merkel, on finding a solution to the backstop problem within 30 days, sterling made some gains.
