Export fears as pound falls

THE pound dropped yesterday, piling fresh pressure on Irish exporters and boosting the firepower of shoppers here eyeing bargains both online and over the Border.

It means Ireland has become more expensive for UK visitors just as the busy tourist season opens.

Sterling suffered its biggest daily fall in eight months, though nowhere near the drop immediately after last year’s Brexit vote.

The latest decline didn’t develop into an all-out rout, as some investors bet the result means a softer stance on Brexit and scaling back of austerity.

Even so, the pound touched an eight-week low against the dollar and its lowest levels in seven months versus the euro – which bought 88.5 pence at one stage, before the pound recovered ground later in the day.

Views in the market are mixed, with some seeing longer term weakness as a damaged UK government negotiates with Europe over the next two years.

“This (sterling) is going to 90 pence,” said Ryan McGrath, an analyst at Cantor Fitzgerald in Dublin.

Justin Doyle, at Investec in Dublin, said the pound is facing a period of increased volatility.

“We can now expect sterling to be reactive to any Tory skirmishes or infighting.

“It didn’t take long for her (Theresa May) own eurosceptic ministers to warn her that a leadership challenge will be in the offing if she attempts to water down her previous Brexit promises.

“Without doubt, the pound will not react well to a leadership challenge.”