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Going Down

Euro goes down, exporters cheer (some of them)

It’s not such good news if your business does most of its trade in Europe.

IRISH EXPORTERS SENDING products into the US and UK markets will be cheering the falling euro, but businesses selling in Europe face more uncertain times.

Yesterday’s surprise decision by the European Central Bank to cut interest rates and inject more money into the region sent the euro plunging against the major currencies.

It dropped below US$1.30 for the first time since last July, well down on the five-year highs of $1.51 recorded in November 2009.

Euro chart2 How the euro fared against the US dollar in the last 24 hours

The ECB announced it was reducing interest rates to a record low of 0.05% per cent amid a raft of new spending measures designed to breath life back into stalling European economies.

The euro was also down against the UK pound, bottoming out at 79p yesterday before recovering slightly this morning, and the Japanese yen.

A mixed bag

Irish Exporters Association chief executive Simon McKeever said the falling euro was good news for businesses selling their products to the big UK and US markets.

The agriculture, food and drink, and information and communication technology sectors could all benefit – although economic instability in Europe would mean a “mixed bag” for local producers, he said.

French Rugby Fans in Dublin Irish food and drink exporters sending goods to the UK or US will benefit from the falling euro Sam Boal / Photocall Ireland Sam Boal / Photocall Ireland / Photocall Ireland

“A weakened euro makes our stuff cheaper (outside the eurozone), but I don’t think Europe’s out of the woods yet.

“Europe is still a big market for Irish exporters and it’s still looking decidedly uncertain there – things are not being helped by what’s going on in the Ukraine and Russia.”

Eurozone trade going down…

The eurozone, which recorded static economic growth in the most recent quarter, is worth about 35 per cent of the €87 billion Irish export market, while the UK and US make up nearly 37 per cent, according to the latest Central Statistics Office data.

Irish exports to the eurozone this June were down 17 per cent on the same month in 2013 and more than 7 per cent lower for the first half of the year.

READ: What do ECB interest cuts mean for Irish pockets? Plenty for trackers

READ: Is this the big bazooka? – €400 billion funding package announced by Draghi

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