The Sterling Euro exchange rate hit a new 7-year high amid fears it could have a serious affect on businesses in Derry this year.
International money markets were at £1 = €1.35 last night – a 13% increase in the past year and a massive 50% higher than in 2009.
It may be great for people planning holidays in the Republic or Spain; and it’s great news if you cross the Border to fill up your car.
But it could keep tourists from the south and Europe away; and it has already turned the tide of shoppers back into Donegal.
The number of people from Donegal shopping in Derry has dropped dramatically in the past month, say traders.
And as shops in Letterkenny offered full value on the exchange yesterday, its retail park was packed with Northern-registered cars.
Most analysts believe the exchange rate will go to £1=€1.40 “sooner rather than later” with the European Central Bank’s Quantitative Easing programme set to begin next month.
“The outlook for the euro remains fervently negative,” one expert was quoted by Reuters.
Harry Adams, of currency specialist Argentex, said he would ‘not be surprised’ if the pound reached €1.55 in the coming months.
The will be bad news for businesses exporting goods or services south, making them more expensive.
And it will make a stay in a hotel in Derry for visitors coming from the EuroZone much more expensive.
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