Faith in euro grows daily

TRADING in the euro rose in the first five days of the new currency's existence. Some firms reported a fivefold increase in the size of average trades as concern that computer systems wouldn't cope with the change faded.

The more willing firms are to trade in the euro, the more likely the currency is to capture a bigger slice of the $1,500bn (pounds 950bn)-a-day foreign exchange market than the mark, its predecessor as Europe's benchmark currency.

Last year the German currency accounted for 30 per cent of the average daily turnover in the world's foreign exchange market.

"On Monday, we hardly saw anyone come in,'' said Alan Moore, the global co-head of foreign exchange at State Street Bank. By the middle of the week: "We really started to see large institutional flows and good two- way trading. The market was more comfortable that systems were working.

"On Tuesday, there were small trades [of between 200,000 euros and 2m euros] going through,'' said Charles Spence, head of foreign exchange sales at ING Baring Capital Markets in New York. "But by Wednesday, people were feeling comfortable enough to trade 20m to 30m a pop.''

NatWest Global Financial Markets in New York saw euro trading volume increase by 30 per cent between Monday and Friday, foreign exchange officials at the bank said.

Still, euro trading wasn't entirely glitch-free. Some European banks encountered problems in the settlement of currency transactions after they failed to follow the directions for cross-border payments. Some transfers from German banks to their Luxembourg counterparts were mistakenly registered as credits at the Luxembourg central bank because of clerical errors.

"The settlement issue is a short-term problem and will be solved within days,'' said Joe Norena, the head of European foreign exchange trading at Deutsche Bank.

Many traders also shied away from pitting the euro directly against the yen, concerned that mistakenly quoting the unfamiliar currency pair could force mistakes.

Still, foreign exchange dealers rated the euro's first week a resounding success, and predicted that trading in it will become increasingly deep, surpassing that of the mark.

"There's a perception that the euro will have more liquidity than the mark had,'' said Commerzbank's currency strategist, Stewart Newnham. Copyright: IOS & Bloomberg

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Admin Assistant

£12000 - £15000 per annum: Recruitment Genius: An expanding Insurance Brokerag...

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders