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Irish fears as Sterling to fall further

Wednesday, March 06 12:37:42

A British economist today said that the pound Sterling has fallen much more than had been predicted but is set to fall further, sparking fears for Irish exports.

The decline of sterling has been much faster and more aggressive than expected and it is set to continue, David Bloom Global Head of Foreign Exchange Strategy at HSBC told CNBC today, adding he was taken aback by the pace of the currency's slide.

"The kind of move we've seen this year has been more aggressive than we were looking for. We were looking for a pretty aggressive move by the end of the year but it [was] only at the end of February and it happened. Currencies are faster and more vicious than you think possible," Mr Bloom said.

He added that sterling's days as a safe haven due to global economic uncertainty were over.

John Whelan of the Irish Exporters Association has said that, for every 5pc decline in the value of the pound against the euro, Irish export values fall by E1.5 billion.

Meanwhile, Anders Vestergard Fischer, an analyst at Danske Bank, said in a note that sterling was now in a "perfect storm" adding that in the short-term there would be no let up in the downward pressure on the currency.

"We maintain our negative view. This [downward pressure] is coming from a combination of an expected weaker dollar, further [monetary policy committee] easing still on the table and a dismal growth outlook," he said.