THE pound is likely to remain above 103p against sterling and could even break 104p this week, according to Dublin analysts.

Which way the pound moves over the next week is likely to be dictated by the Bundesbank and Wall Street. A rate cut from the German central bank on Thursday would ease the pressure on the Irish pound against the mark and halt its rise against sterling.

The Irish currency fell against the mark last week on the back of large falls in the dollar and sterling. Although both currencies are likely to be more stable this week, the meeting of the Bundesbank Central Council will be closely watched.

The German central bank is expected to cut its repo rate at the meeting on Thursday. That would take the heat out of the currency and stop its strengthening any further against the dollar, said Mr Jim Power, chief economist at Bank of Ireland Treasury.

"In that case the pound is likely to fall back towards 103p against sterling," he said. He added that failure to cut the repo, or at least change the current fixed rate to a variable rate would send the wrong signal to the markets and push the pound to 104p, or above.

"This is the last opportunity for the Bundesbank to cut the rate before the summer holidays," he said. "So maintaining the rate would be seen as a buy signal for the Deutschemark. That would lead to pressure on the dollar and sterling and consequently the pound."

In that case, Mr Power said the pound would rise to 104p against sterling and perhaps precipitate further intervention from the central bank in a bid to stop it falling too far against the mark.

Dr Dan McLaughlin, chief economist at Riada Stockbrokers, warned that the authorities may have to be prepared to see the pound go above 105p against sterling, if the central rate of 2.41 marks is to be maintained.

Irish exporters will be watching the pound very closely over the coming weeks. Last week, Mr Colum MacDonnell, chief executive of the Irish Exporters Association, warned that job losses would be inevitable if the pound continued to appreciate against sterling.

Dr Brendan Walsh, economics professor at UCD, also said he saw further intervention as a possibility. Although he added that the central bank is likely to be careful how far the pound moves against sterling. "The central bank certainly has enough reserves to prop up the pound," he said.

Further slides on Wall Street could also hurt the dollar and feed through to the pound, Mr Power said. Last week, it was sharp falls on the Dow Jones which kicked off the currency drama. However, numbers out this week are not seen as likely to impact significantly on the dollar.

The week beginning July 29th is a different matter, according to Mr Dermot O'Brien, chief economist at NCB Stockbrokers. In that week there is second quarter employment cost index on which there is a special focus as well as second quarter GDP, July employment. If all the numbers are strong, and the indications are that this is likely, can a rate hike be far behind, Mr O'Brien asked.

It was that fear which sparked the falls on Wall Street last week.