The Euro: New York soars into new era

Wall Street
Click to follow
The Independent Online
ONE DAY the euro could become powerful enough to threaten the decades-old hegemony of the US dollar as the world's premier reserve currency, but yesterday it received an enthusiastic welcome from American investors and currency dealers.

Following the lead of European markets, shares rocketed on Wall Street, with the blue chip Dow Jones average gaining more than 150 points in morning trading. "All eyes are on the launch of the euro," said Peter Cardillo, of Westfalia Investments in New York.

On the foreign currency market, dealers greeted the debut of the new currency with studied calm. "Basically we are trying to get our bearings, memorising the new quotes so that we can rattle them off when necessary," said Mike Malpede, a senior currency analyst at Refco Group.

The outlook for the euro's value against the dollar appeared strong. "I don't know of any analyst who is negative on the euro," Mr Malpede added.

The Clinton administration has been consistently supportive of the new currency's introduction. "Some have argued that a Europe with a single number in the global directory might ultimately pose a threat to the United States," the Deputy Treasury Secretary, Larry Summers, said recently. "But in a global economy, the United States has infinitely less to fear from an open and integrated Europe that continues to take its share in global responsibilities."

Jeffrey Shafer, a former Treasury under-secretary, said: "I don't see the euro as a real threat even if it carves out more of a share than the Deutschmark and the other European currencies combined. There are other fundamentals that will matter much more than that."