24 June 2016: Currency market movements - a short term indicator of the potential Brexit impact on the Irish and UK economies
Sterling dropped by as much as 11% compared with its pre poll level, as the Brexit vote became evident overnight, but recovered to a net fall of c.7% off following the Bank of England's announcement of a GBP250 bn intervention fund to calm markets. The selloff is a measure of the economic impact of the vote*, on the UK, but another aspect is the impact on the euro,which has fallen also, but by a lesser amount against the US dollar than the pound. After an initial tumble of c.8%, the euro recovered along with the pound to trade c.5% off.
These discounts indicate the immediate economic value writeoff for the UK and the EU of Brexit. It is a lose-lose scenario, therefore, with no winners. For Ireland a similar prognosis applies, Ireland losing by about this amount straight off, and in the longer term, even greater opportunity losses over time.

Ireland's economic loss from Brexit is exceeded, though, by the UK's, which will be a multiple of that of the Republic of Ireland.

See today's chart for GBP/USD here
See today's chart for GBP/EUR here
See today's chart for EUR/USD (The Republic of Ireland's main external exchange rate) here

Trend:
After the Bank of England announcement from Governor Mark Carney, the sterling exchange rate stabilised, as did the euro, providing a floor to the precipitate fall in sterling in early trading in London, bringing the 'cable' (the USD/GBP currency pair) to a rate not seen since 1985. The recovery was followed by a further drift, but, if rates stabilise at higher levels than opening on the day, the Bank of England will consider its management of the initial foreign exchange crisis as a job well done.

* The idea behind this is that the currency markets work to offset assessed economic impacts, therefore, by devaluing the currency by an amount, the markets provide an assessment of the compensatory movements required to offset the negative impact of what economists might describe as a 'stochastic change', in this case the unexpected Brexit vote.