The Commission has proposed that the euro should be fixed at 1.95583 German marks, 6.55957 French francs, 1,936.27 Italian lire, 166.386 Spanish pesetas, 200.482 Portuguese escudos, 5.94573 Finnish markka, 0.787564 Irish punts, 40.3399 Belgian/Luxembourg francs, 2.20371 Dutch guilders and 13.7603 Austrian Schillings. The rates have been ratified by European finance ministers and officials of the 11 legacy countries, which means that from Friday (today) these currencies are history.

The rest of the world will begin trading in the euro only on January 4, when the markets open after theChristmas-New Year break. "I expect the euro to open at 49.70 to 50 tomorrow. Initially the currency will strengthen -- at least for the first six months -- after which there are chances that it might weaken," says P H Ravikumar, senior executive vice-president at ICICI Bank. However, Vasan Sridharan, economist at the Standard Chartered treasury, says that the quotes will depend on how dealers handle the new currency. "There might be some volatility," he adds.

The volatility in yen-deutsche mark trades has made it difficult to predict a narrower range for the currency in India. Even when trading starts in the international markets on January 4, the euro is expected to be volatile. "We don't expect the euro to stabilise on January 4. Some of the major marketmakers will not be quoting euro on the first day. They may enter to give quotes only on the subsequent days," said Rajiv Baruah, head of foreign exchange, Deutsche Bank. Deutsche Bank was quoting the euro at 1.16673 dollars on Thursday late evening inMumbai.

C Girish of Mecklai Financial and Commercial Services expects one euro to be equal to Rs 49.70/75. "Here we are making an assumption that one European currency unit (ECU) will remain stable at 1.17 against the dollar and the rupee will range between 42.50/55 against the dollar. If this is so, the Indian rupee will range between 49.75/50.00 against the the Euro," he said.

The euro, with its base in a low inflation area, is expected to vie with the mighty dollar as a global reserve currency, benefiting the world's new dominant trading power, the European Union. The EU's Eurostat statistical agency has said that average consumer price inflation in the euro zone fell to 0.9 per cent in November.