The euro rose to new record highs against sterling this morning breaking through the 92 pence level.
The moves increase the likelihood that sterling could reach parity against the euro after falling through the 90 pence level against the euro zone currency for the first time since it was launched in 1999.
At 1.22pm sterling was trading at 91.8 pence against the euro.
The fall in sterling tracks the worsening outlook for the British economy and the Bank of England's cutting of interest rates from a recent 5.75 per cent peak to a 57-year low of just 2 per cent, below the European Central Bank rate.
The collapse of sterling and the weakening dollar following the US Federal Reserve's rate cut last night is of significant concern to the Irish Exporters Association (IEA).
In a statement yesterday the IEA said exchange rate losses over the past 12 months had "severely hit the profitability of many exporters".
Irish-based firms exporting to the UK have seen a 20 per cent exchange rate swing in less than six months.