FX Management In The Run-Up To EMU; A Practical Approach By Frank Smith

BANKS

LONDON--When EMU goes ahead as planned on January 1, 1999, the most immediate and obvious consequence will be the elimination of foreign exchange risk on transactions between the 11 participating European countries.

Unless trading patterns change, this means that the majority of intra-European business will be free of currency risk, while euro/US dollar will replace dollar/Deutsche mark as the leading trading currencies.

In practice, FX risk between the 11 currencies (referred to as National