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Currency Markets Surge on Smooth Euro Changeover - 2002-01-02

The euro, Europe's new single currency, has undergone its first real test as citizens of the 12 nations where it has become legal tender headed back to work and stores reopened. The smooth changeover prompted a surge in the euro's value on currency markets.

Despite a few minor glitches, the rollout of the euro has been successful after two days of use. Currency traders gave the new money a vote of confidence, sending the euro up more than one percent against the U.S. dollar and more than two percent against the British pound.

European Union officials say the transition to the new currency is going even better than they expected. But they also say that the big test is still to come. The first Saturday in January is traditionally the month's biggest shopping day, and officials say that is the day to watch.

One potential problem is a shortage of euros. Across the 12 nation eurozone, shopkeepers complained that they did not have enough change in euros to give back to their customers. So some opted for giving change in the local currencies. In Italy and Spain, shoppers appeared to want to unload their lire and pesetas before spending their euros.

Despite the shortages and predictions of endless lines and angry scenes at cash registers, European merchants and shoppers alike seemed to be taking the changeover in stride.

The EU says 80 percent of cash dispensing machines in the eurozone have now been stocked with euros. But Italy's RAI television network reported that, in Italy, only one-third of the money machines were giving out new euro bills. It said one-third were still dispensing lire, and the rest were out of order.

Bank employees in Italy and France tried to stage strikes for higher pay, but they met with little support and caused only minor disruptions.

EU officials say they expect that by next week more than half of all transactions will be in euros. The old currencies will continue to circulate for a couple of months in most places.