NEW YORK (MktNews) - For those attempting to join this week's euro-dollar bull band wagon, it may be wise to step back and look at what lies ahead for the beleaguered currency. There is almost a deja-vu feeling of Y2k, when article upon article in the Euroland press deals with the introduction of the actual notes and currencies and the effects this will have on industries and people. Currency traders and analysts have been saying for months that one element weighing on the euro is the lack of a hard currency, one that people can put in their pocket and feel safe it has value. "The euro-dollar is a virtual currency," said one New York trader. "People have been reluctant to hold euros; they want to wait for the notes to come in," he added. Euro bills and coins will go into circulation in January 2002 and the old currencies will cease being legal tender by the end of March. According to a story in The Times in Britain, an alliance of retailers and consumer groups forecast chaos ahead of the so called "e-day", citing European Central Bank mismanagement. The ECB will have only weeks to issue 50 billion euro coins and 14 billion bank notes at the start of 2002. European businessmen were quoted saying that ECB officials need to act fast to prevent a serious cash shortage leading to a collapse of confidence in a fragile euro, still struggling to hold its ground. There are concerns that ATM machines will not be replenished quickly enough and fears of snaking lines at grocery stores and train stations, all adding to the tensions among local and area businesses. National central banks have been actively campaigning to get citizens to turn in old notes and coins and get a euro credit in their bank books. A recent New York Times article focussed on the Bundesbank's efforts to make sure the exchange of as much as 100,000 tons of old marks and pfennigs goes as smoothly as possible. Clicking on the Bundesbank home page, web browsers are drawn to two cartoon characters who implore bank customers "Her Mit den Schlafmuenzen!" to bring in their "sleeping money". Exchanging the old coins is only half the battle, with the more daunting problem involving the new coins themselves. The article says the new coins will weigh 250,000 tons and will have to be stockpiled in warehouses and vaults around Europe, just as the old money is being collected. Other central banks have also made a plug to get customers to turn in coins earlier, but little progress has been made so far, with a general public unwillingness to exchange their national currencies in favor of an unfamiliar one. Currency traders have been reading the many articles with interest, and have begun to wonder what the effects will be on the euro-dollar as the introduction date nears. Ashraf Laidi, chief currency strategist at MG Financial, said the market will likely be divided into two camps as the hard currency is introduced. "The first camp will be those who feel the euro-dollar will be boosted by the introduction of notes and coins," Laidi said. "The other camp will be based on grounds that when markets realize that the European public is not ready to handle the adoption of the euro, the euro will suffer. Laidi said that the latter camp is more likely to be in favor as this year ends and January 2002 looms ahead. Looking ahead to the hard currency's implementation, Laidi made some comparisons to the months leading up to the euro-dollar's introduction. "Then Chancellor Helmut Kohl was masterful in how he manipulated the market to believing in the euro," said Laidi. "Many were targeting a $1.1000 euro-dollar and by the time the first trades were done in January 1999, it was trading around $1.1800," Laidi added. There would be few that would believe that the ECB, with its lack of "one voice" of late would be able to build a similar confidence leading into January 2002. Laidi said that the euro-dollar's fate later in the year is likely to be decided "more on the economic landscape of the eurozone" and "who would be at the helm of the ECB" than of insecurities with regards to the new coins and notes. Average citizens are not the only ones concerned about the implications of the physical introduction of the euro; Euroland officials remain concerned about the inflationary impact it may have. Luxembourg's prime minister, Jean-Claude Juncker, on Friday warned eurozone finance ministers and the European Central Bank to remain vigilant to the possibility of a rise in inflation with the physical introduction of the euro in January 2002. Speaking at a conference at the Luxembourg central bank, Juncker said policymakers "should be very careful about the possibility that prices may rise" when notes and coins are introduced next year. He said a spike in prices, perhaps induced by confusion over the introduction, would give a "bad sign" to financial markets at a sensitive time. To give an idea of the diversity among economists in predicting where the euro-dollar will be in six months, analysts at Brown Brothers Harriman are forecasting $0.9500, while currency strategists at Citigroup are calling for $0.8600. Analysts in general will agree that the direction of the euro-dollar depends not only on whether the ECB can regain some of the credibility it lost by lowering rates last Thursday, but also on whether or not the United States begins to recover in the second half. Any problems that the introduction of coins and notes brings for the euro is likely to just be an additional straw on the camels back that may or may not be already broken.// Vicki Schmelzer