A related achievement has been the spread of usage of the euro for invoicing and financing trade, not only within Euroland but also by firms in other countries trading or competing with Euroland or involved in supply chains leading there. This is a phenomenon that is perhaps less evident in Asia than in countries nearer to you here. Even less evident to us in Asia is the impact which the euro may be having on competition and internal pricing within Euroland, now that the single currency has stripped away exchange costs and other impediments to price comparison. I must emphasise that I have not had the opportunity to test this thesis for myself, so I can only rely on what others tell me. Some claim that this will prove to be one of the most emphatic benefits of the move to a single currency. I could well believe that, but I am unsure what progress may yet have been recorded. Thus, you will appreciate how in Asia we may not be aware of the various benefits that the euro is delivering, whereas we are relatively well served by the sceptics. There may be a marketing job to be done here. And it is one which, to carry conviction, must be performed as much by businessmen or 5  BIS Review 23/2000  bankers who actually use the euro and experience the benefits, as by central bank, government or European Commission officials, or by politicians and their aides.
Very recently we informally polled ten leading financial institutions in London. Their forecasts for the dollar/euro exchange rate by the end of this year ranged from $ down to 90c. This is a considerably wider spread than the trading range already experienced and suggests a huge measure of uncertainty, to a horizon of only ten months. Of course, one might argue that this represents uncertainty over the dollar as much as the euro. Yes indeed, and I apologise for analysing things very much from a dollar base. Over time, all currencies have experienced considerable volatility - the dollar, the yen, the euro and its ancestors, sterling and so on. Yet in all of these, investors have been able to enjoy significant positive real rates of return over the long term. That may not be good enough for everyone: some seek short-term gains; others may be worried by mark-to-market volatility in the short term even if they are there for the long haul. But long-term investors will give considerable weight to the overall economic and monetary management of the economy. As I mentioned earlier, there are a number of aspects of the management of the Euroland economy about which perceptions from Asia may be somewhat sceptical. As for monetary policy, I would suggest that it is perhaps natural for outsiders to be rather hesitant in their assessments, in view of the new infrastructure for monetary policy, but as the ECB beds down one would expect confidence to grow.