Irish consumers and businesses must be breathing a collective sigh of relief in response to the recent recovery in the fortunes of the euro. Since its introduction, the euro has experienced a relentless decline against all the major currencies finally slipping below 90 US cents against the dollar. This translated into an all-time low of 73 pence against sterling. For consumers and businesses that regularly purchased British goods and services, this was a punishing rate of exchange.

For Irish investors, the strong sterling exchange rate could be positive or negative depending on individual circumstances. Historically, many Irish investors viewed Britain as a more attractive outlet for their funds than the domestic market.

The wide range of quoted shares, ease of dealing and marketability and the fact that many British companies are Irish household names attracted Irish investors to British shares. For these investors, the weak euro will have provided a windfall valuation gain to their portfolios.

However, for those investors that are at the stage of investing fresh money in the stock market a pound/sterling exchange rate below 75p presented a strong disincentive. For example a British share priced at £1 sterling would cost almost £1.35. At such a low rate for the pound, the risks of currency losses were extremely high.

Now the euro has recovered significant ground, the pound is back above 80p sterling and could represent a reasonable investment level. A return to parity against sterling seems a very distant prospect. Even if the euro builds on its recent strength, the conditions do not seem right for a major reversal in the euro's fortunes. The pound/sterling exchange rate may stay in an 8085p range and could well represent reasonable long-term value for investors considering British stocks.

The more significant issue is whether British shares offer attractive investment returns in their own right, since it is the performance of the underlying businesses that will ultimately determine investment return.

There are many large, quoted British companies that trade internationally and command leading global positions in their respective industry sectors. Furthermore, the British market offers depth and liquidity that is second only to US stock markets. The advent of electronic share dealing dramatically enhances the attractions of the market to private investors. Electronic share dealing will be widely available in Ireland before year-end and will lead to a dramatic reduction in dealing costs. Just as importantly, information will be widely available at minimal cost.

The table lists a selection of blue-chip quoted British companies, all of which have significant Irish operations. Royal Bank of Scotland now owns Ulster Bank, British Telecom recently took over Esat Telecom and Marks and Spencer has a very successful Irish operation. The inherent attractions of British stocks and their familiarity suggest that Irish investors will continue to look for investment opportunities in the British stock market on an ongoing basis.