This followed a cautious debut in Asia, where the euro gained in value although trading remained slim. Around the world, traders and investors are taking their time to get used to the new euro exchange rates and buy and sell spreads.

Central banks, meanwhile, are monitoring whether interbank trading systems are able to cope with the new currency.

Scott Muller from London's Deutschebank: "We expect the week to go well"

But there are signs that the euro is making the start its creators have hoped for. Nick Parsons, chief currency strategist at Paribas Bank in London, said: "We're expecting that the euro is by far and away going to be the star performer in 1999. There are significant real money flows that are going to be coming into the euro, from Asian central bank sources, from Asian institutional investors, not just in Japan but throughout the continent."

Consumers can sit back and relax. Euro bank notes and coins will not be introduced before 2002, so they have three more years to get used to the new currency and euro prices.

Euro stronger

Light trade marked the euro's debut in Australia

In London the euro climbed to the $1.18 level - up two cents - and went above £0.71.

Sydney, Australia, was the first major market to trade in euros, starting on Monday morning at 0500 local time - early Sunday evening in Europe. The euro opened in Australia at $1.1747 and traded as high as $1.1869 in Tokyo. This was well above the $1.1685/90 for the euro's predecessor, the artificial European Currency Unit which it replaced on a 1:1 basis.

BBC's Tony McMahon: Australia's first trade - "buy five million euros"

The euro later slipped back to its previous level with signs that European banks were stepping in to limit the rise. Too strong a euro would harm the continent's export industries.

The BBC's Asia Business Correspondent, David Willis says the start is just what European politicians and central bank officials wanted - an enormous economic change starting without any disruption to the financial markets.

'Remarkably stable'

During the first months of trading, the euro-dollar rate is expected to be somewhat volatile as the markets strive to achieve a balance between the two currencies.

However Peter McGrath, Chief Dealer in spot currencies with Westpac Bank in Sydney, described early trading as "remarkably stable".

"I think European authorities would generally be ecstatic with the way it started here, they're keen to see a stable euro and that's exactly what they've got so far," he said.

The BBC's Rory Cellan-Jones: "Teething problems are inevitable"

Once the situation has settled the Japanese yen could be the overall loser. Bankers and traders expect many Asian investors to begin shifting a big amount of their savings into bonds and other investments denominated in the euro, dumping yen in the single currency's favour.

Getting euro-ready

German bank staff wait for the introduction of the euro

Triumphantly launched on 1 January the euro was immediately heralded as one of the most important economic events of the 20th century.

Financial institutions had employees working around the clock over the New Year weekend to get ready for the euro. But even though Europe's banks and other financial institutions have given the 'all clear', there are still fears that some payment and accounting systems may not be ready. Misdirected and miscalculated payments could cost banks millions and create chaos across the world's financial system.

Looking at London

London holds the key to euro currency trading

The reaction of currency dealers in London will be particularly important. Although the UK has decided not to join the 11 countries that have initially signed up to the euro, around one in every three of the world's foreign exchange deals are made in London.

It will be also be a testing time for major continental European stock markets such as Germany and France, where stocks will now be quoted in euros.

It is unlikely that there will be a big rush for euros, because most banks and governments already hold them - their old Deutschmarks, French francs and other Euroland currencies have now become euros.

Nonetheless, many analysts believe that the euro will prove to be an even stronger currency that could end the US dollars' long-standing dominance in the world's financial markets.

The banking community is likely to purchase large quantities of euros in preference to currencies outside Euroland such as the pound sterling or even the dollar.