Posted on: Thursday, January 3, 2002

Euro rises to 90 cents against dollar after debut

By Elliot Blair Smith
USA Today

LONDON — Euphoria conquered euro-phobia yesterday in the first full day of foreign-exchange trading after the coins and bills representing Europe's new money were introduced New Year's Day.

The euro gained more than a penny to more than 90 cents against the dollar in New York. However, amid Europe's economic slowdown, doubts persist about the new money's staying power at current values.

European consumers raced to pocket and spend the new money, and the European Central Bank reported bank ATM withdrawals as high as four times normal in some places.

"The euro cash changeover is going smoothly, even better than we had expected," said ECB Governor Eugenio Domingo Solans.

But some hitches were reported:

• Traffic backed up at toll booths outside Athens, on highways in Italy and on the main bridge into Lisbon as drivers tried to get euros as change from attendants.

• Lines were longer than usual at some banks and post offices. In Naples, Italy, police were called when retirees waiting for their first euro pensions got unruly.

• Bank unions in France and Italy tried to stage strikes but caused only minor disruptions.

• In Ireland, many complained that some pubs were already rejecting old Irish coins because two sets of change was proving too burdensome.

Still, foreign currency traders were buoyed by the euro's virtually glitch-free rollout at midnight Monday in 12 European countries. Of the European Union's 15 members, only England, Denmark and Sweden retain national currencies.

"The physical introduction put wings to the euro," said Oliver Hamann, foreign-currency trader at Commerzbank in Frankfurt, Germany. "Until now, people have been skeptical of how it would function. Now they have euros in their pocket, and they realize we can buy something with it. It works."