Because the euro is a new currency there are no charts or previous history on which to base predictions. Some analysts, using old deutschmark and dollar graphs, say it will fall to 92 US cents in the coming days. Others believe it will fall through 90 US cents, some even point to 88 US cents. All are, to some extent, simply putting their fingers to the wind. No one predicted this persistent weakness.

Of course, last year euro weakness did not really matter. In some ways it was a boon, encouraging economic recoveries in Italy, France and Germany to get off the ground. It gave their exporters a competitive advantage over their British and US counterparts. It did the same for exporters here, negating the impact - to some extent - of higher general and wage inflation.

But now the core European economies are recovering, the focus is on reining back inflation and that is the European Central Bank's main job. Figures last week showed that average euro-zone inflation was 2.1 per cent, exceeding the ECB's own 2 per cent upper limit. Irish inflation on this measure is some 5 per cent, way above any sort of sensible limit.

A continuing weak currency puts pressure on prices. Imports become far more expensive. In Ireland, with so many goods imported from Britain, there can be little doubt but that some price pressures will feed through to the consumer price index.

This will also happen on a European scale and further interest rate rises are likely as a result. How far these will go remains open to question.