THE pound ended last year at a new low against sterling and the strength of the British currency looks set to continue into 1997. The Irish currency ended at 99.88p sterling, its lowest level for almost two years. Meanwhile, it edged up further against the deutschmark to DM2.6075 and is now trading at its highest level against most of the other ERM currencies since the 1993 devaluation.

In a short trading session on New Year's eve, sterling remained firm on the international markets, breaching $1.71 at one stage for the first time since late 1992 and continuing to trade at its highest level against the deutschmark since 1992's Black Wednesday.

Sterling's strength is pulling up the pound against other currencies and it gained almost two cents, against the dollar to $1.6921 and rose slightly against the deutschmark.

Analysts are forecasting continued strength for sterling this year. Further sterling strength would force the Central Bank to choose between letting the pound drift down against sterling - as has happened in recent weeks - or intervening to buy the currency in the markets.

But such intervention would push the pound even higher against the other ERM currencies.