An economic report from Ulster Bank suggests that sterling is set to weaken against the euro putting pressure on Irish exporters already strapped by the decline in the value of the US dollar.
Economist Simon Barry in his Quarterly Economic Report also forecasts a new all-time high of $1.45 for €1, with $1.50 a possibility.
Mr Barry says that slower growth in the UK economy will lead to the Bank of England cutting interest rates, sending sterling to a level of £0.72 against the euro.
The current price is £0.69.
He said the global growth backdrop remains positive.
However, he said that Irish exporting firms should take an active approach to the management of their foreign exchange exposure, given that Ireland's two main trading partners, the UK & the US, are not part of European Monetary Union.
In a separate report on the economy, AIB suggests that GDP growth will slow to 3.3% next year because of a further weakening in housing activity, slower growth in consumer spending and Government spending on services.
AIB economist John Beggs predicts that this will recover to 4% growth in 2009, as the downturn in housing activity slows, providing less drag on the economy.
