|
Daybreak for the euro
|
 |
January 3, 1999: 5:02 a.m. ET
Trading of new currency starts in Australia as European banks give OK
|
NEW YORK (CNNfn) - The euro -- the ballyhooed new currency that is the newest product of the European Union -- made its official debut in global trading early Monday morning, after European banks gave the all-clear sign late Sunday.
But as the sun rose over Sydney's dealing rooms, trade subsided as abruptly as it had opened while the foreign exchange market pondered where to go next with a currency that many once claimed would never see the light of day.
"It traded 20 to 30 times before the official opening but hardly at all since. ... Hardly worth getting up early for," said one trader at an Australian bank.
"Everybody's just been very cautious in view of the expectation that the ECB (European Central Bank) will try and reduce volatility ... so it's been in a very narrow range," said Steve Brice, G7 treasury economist at Standard Chartered in Singapore.
"So far, it's been very smooth and very unvolatile. I still think the fear will be that the central banks will be on either side. Although we'll see vastly increased liquidity in early Europe, I don't think we'll see too much speculation on either side."
In Sydney during the wee hours of Monday morning, the euro traded at US$1.1747. Other opening trades for the euro were at 0.7080 sterling, 1.6110 Swiss francs, and 1.9190 Australian dollars. In addition, Tokyo bankers told Reuters the euro was trading at 133.15 yen.
The European Central Bank reported Sunday that the conversion of 11 member states to a single euro currency has been successfully completed.
"In the monitoring of conversion activities conducted by the ESCB during the changeover weekend no incidents have been reported that may impair the smooth start of the system," the ECB said in a statement.
"The ESCB considers this to be a sign of the quality of the preparatory work conducted over recent months and years by the central banking community and by private financial market operators."
In addition, banks throughout Europe said on Sunday they had successfully completed their preparations for the euro and were ready to trade the new currency.
The Bank of England said all major market firms in London, Europe's financial market capital, were prepared.
"As a result of the intense preparatory work, and its successful implementation over the conversion weekend, the Bank of England is confident that London market firms, and the London markets, will function normally from tomorrow. The bank will continue alongside the Financial Services Authority to monitor developments in the coming days as the market beds down," the bank said.
Leading market participants and central banks throughout continental Europe were equally upbeat.
-- from staff and wire reports
|
|
|
|
|
 |
|
