The euro hit new record levels against sterling and the US dollar today as fears about the health of the US economy escalated.

The euro struck a new peak of $1.5905 in Tokyo this morning, up from $1.5669 late on Friday in New York. It later slipped back to $1.5760 in volatile European trading.

Meanwhile the euro hit 79.12p against sterling this afternoon as the problems at US investment bank Bear Stearns led to worries about the UK banking sector.

The weaker sterling is more bad news for Irish exporters, as it makes Irish goods more expensive for UK buyers.