Currency conversion gives us winning edge
Published 31/08/2011 | 08:00
A quick trip down to Dublin at the weekend has helped crystallise a few things. Firstly, the motley crew we're sending to New Zealand to contest in the Rugby World Cup could be up against it. I'm merely an enthusiast and not a professional rugby commentator but if the Ireland team were a market they'd currently be going through a bearish period and look likely to experience their own form of dead cat bounce (it's a stock market term, honest) down under. But let's hope for a spike in fortune.
Secondly, staying any length of time in Dublin can be an expensive affair. Having come to their senses over the outrageous ticket pricing last autumn, the powers that be at the Irish Rugby Football Union seem determined to squirrel money from the punters by every other means at their disposal. Drinks, food, programmes and those odd radios which allow you to listen to the referee and players swear could easily tip the average punter like yours truly into levels of debt that amount to the grand total of Greece, Portugal and, well, Ireland. That's before you take into consideration fuel, hotel and parking charges.
Do I sound a little curmudgeonly? Well I am, but rather than moan about the cost of a weekend in Dublin I should be glad that a trip across the border sets us back so much.
Because the euro has remained relatively strong against sterling, the price of everything appears a lot more expensive to those of us who are paid in pounds. That's bad for rugby supporters, bad for importers but great news for exporters. Given that the recovery of the Northern Ireland economy from recession is said to be dependent on us boosting our exports, we should be quids in.
And although the outlook for the wider economy looks as positive as Ireland's chance of reaching the World Cup Final, we're actually in a better position than we were a year ago when it comes to currency. Then it would cost 82p to buy a euro while now it costs 88p. So to buy euro-priced goods and services costs us more while for people in the eurozone to buy our goods and services costs them relatively less. This is, to put it mildly, madness given you'd expect the euro to fall over the eurozone crisis. But ours is not to question why so we should just focus on getting those goods and services out there and take advantage of one of the few plus points we can claim as our own.
One pound will buy you $1.64 compared to £1.54 a year ago, so the reverse theory applies when it comes to our cousins across the pond i.e our goods and services are more expensive for buyers who are using dollars. So, maybe the Ireland rugby team should play in New York next time?