But as the euro goes live, the spectre of George Soros again hangs over the pound, which has remained outside the euro- zone. The currency speculator, who made a reported $1bn from Britain's departure from the exchange rate mechanism (ERM) in 1992, is said to be waiting in the wings ready to punish sterling. He may have to wait for his opportunity, however, as trading in the euro is expected to be thin in the early days while dealers become accustomed to the new currency.
The Bank of England claimed yesterday that the City's "conversion weekend" had been successfully completed after a marathon 100-hour effort to change over systems after markets closed on 30 December. But as Far Eastern markets opened overnight it was still unclear whether dealings in the euro would start without problems. No bank has admitted the possibility of failure though one consultancy group warned that 40 per cent of all euro transactions could fail because of computer problems. "Few financial institutions have thought further ahead than the first day's trading," said Cap Gemini, a computer group involved in the conversion process.
But the mood in London was upbeat yesterday as tired bankers headed home for a brief rest before returning to their desks this morning. The Bank estimated that about 30,000 City staff had taken part in the conversion process, which has been compared to the Stock Exchange's "Big Bang" of the 1980s. It has required banks to redenominate prices, cash balances, trading positions and historical data in euros.
From today, dealers used to trading the US dollar against the German mark will trade it against the euro instead. The same will go for all of the 11 currencies that form part of the euro-zone. Sterling is not included as Britain has not yet taken the decision to join.
In an almost military manoeuvre banks cancelled staff leave, kept canteens open and block-booked local hotels. Bankers Trust said its staff had consumed 1,400 bars of chocolate, 5,000 cakes, 3,500 rashers of bacon and 2,000 sausages over the New Year period as they worked to make systems ready. Barclays Capital, a division of Barclays Bank,booked 80 rooms at the Britannia Hotel in Docklands and brought in first aid experts in case of emergencies.
David Clementi, deputy governor of the Bank of England, said: "The conversion weekend across the City of London has gone very smoothly indeed , as we expected. The City was well prepared."
Sydney was the first market to start euro trading where itopened at US$1.1747 and was trading at 0.708 against the pound. In Tokyo the euro opened at a rate of 133.15 yen. Volumes were thin as dealers reacted with caution.
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