Trading in the euro, Europe's new single currency, will effectively start on Monday, after leading banks from the US and Europe said they were to offer prices in the currency.
Citibank, the US bank with the world's largest foreign exchange operation, and ABN Amro, the Dutch bank, announced yesterday they planned to quote prices in the euro for their clients starting from Monday.
The banks' decision to offer an unofficial "grey market" in the euro - before it comes into existence next January - is a strong sign the financial markets have fully accepted the launch of the currency.
Guy Whittaker, Citibank's global head of foreign exchange, said: "We thought we would take the initiative and establish a grey market. As a leading bank, we need to take a leading role in this."
Citibank, which already trades more than 140 different currencies in 100 countries, will offer a full range of interest rate contracts and options using the euro, including forward contracts and swaps.
ABN Amro yesterday started advertising its euro rates against the US dollar, sterling and the Japanese yen using the Reuters network of terminals. It priced a contract to sell 1.1240 euros for one dollar, to be delivered on the first trading day of 1999.
ABN Amro has also said it will print bank statements denominated in both Dutch guilders and euros.
Mr Whittaker said Citibank had decided to offer prices in euros after some enquiries from the bank's clients, and expects the new currency instruments to provoke additional interest from more.
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