Sterling edged lower after a tumultuous week last week in which it plunged to three-year lows before rebounding strongly as politicians voted to block a no-deal Brexit. However, the UK could still leave the European Union without a deal, and that would be a big problem for Irish exporters.
A no-deal Brexit would bring its own issues for Irish exporters with tariffs and trade barriers, but currency fluctuations are a huge issue. This week will be another pivotal week for Brexit.
Prior to the Brexit referendum announcement, euro/sterling traded at 70 pence. Exporters have had to deal with a 30% depreciation in the currency.
"There was some reprieve for sterling last week, and we're starting to see Irish corporates use these slightly better levels to hedge," said Mark O'Brien, Head of foreign exchange at Investec.
"They will be keeping a very keen eye on what happens in the UK; what happens in Westminster, when the election is going to be. Obviously an Irish exporter wants to see a no-deal Brexit stopped, and that should see a much better sterling for them."
Mr O'Brien said Investec is starting to see some hedging taking place. "Depending on the type of margins that companies operate with, but we would think that with no-deal Brexit still on the table, it would be foolish not to have some hedging in place," he said.
Separately, the European Central Bank concludes its policy meeting on Thursday, when officials are expected to cut interest rates and outline plans for economic stimulus measures.
"There's uncertainty on other measures that Mario Draghi may introduce quantitative easing," Mr O'Brien said.
Quantitative easing is a modern way of printing money, introducing new money into the supply. The hope is that QE will get the European economy back on a stronger footing.
"It depends on the timing, and the size and the scale of QE, but if it is of significant size then it should weaken the euro which would be good for the Irish exporter," he stated.
Meanwhile, the US is set to resume trade talks with China early next month. Irish exporters will also keep an eye on those negotiations.
"The trade talks and what will happen there will have a big influence on the strength of the dollar so we will watch that closely," Mr O'Brien concluded.