THE pound has fallen below 97p against sterling and could be heading for 96.50p. At the same time it has fallen against the deutschmark after failing to keep up with the British currency.
It is now trading 11.62 per cent above the weakest currency in the grid, the Italian lira, having closed at 96.67p against sterling from 97.20p and at DM2.6600 from DM2.6605 a day earlier.
Mr Jim Power, chief economist at Bank of Ireland, said he now expected the pound to fall towards 96.20p and to rise towards 12 per cent above the weakest currency in the ERM grid.
The whole story was now really about independent sterling strength, he said. "The markets clearly believe that there will be UK rate rises once the UK election is out of the way."
He added that rate rises in London would force the pound down against sterling and put pressure on it within the EMS.
The Irish Co operative Organisation Society has warned that the continuing strength of the pound against the deutschmark will this weekend trigger another revaluation in the Green Pound of around 2.8 per cent.
The representative body said this would be the third revaluation in five months, and that the trend was making it almost impossible for Irish food exporters to return a viable margin on sales to several European countries.
