The pound remained above 85p against sterling as the markets continued to favour the deutschmark. The pound closed at 85.76p against sterling from 85.49p a day earlier and at DM2.5145 from DM2.5128.

According to Mr Jim Power, chief economist at Bank of Ireland, the dominant theme in the markets is still the possibility of German interest rate rises and the chance they will increase sooner rather than later. "There has been a fundamental reassessment of the mark across the board," he added.

Overall the mark continues to strengthen against sterling, the dollar and the yen.