Trade settlement if the euro becomes obsolete as a currency

Discussion in 'Forex' started by kxvid, Dec 4, 2011.

  1. kxvid


    How will foreign exchange trades be settled? It seems like there is no mechanism for this. There is likely some kind of "force majure" clause in futures contracts, however what about OTC foreign exchange transactions? Is there any precedent for this happening in the foreign exchange markets?
  2. Not really... There's a lot of questions around it, but no real answers. The likely outcome is a settlement in some sort of a basket currency, like ECU.
  3. The opposite of how euro was created. I was a teenager chasing girls back then but some our our senior members can enlighten us on how the euro was created and what happened to the franc, mark, and other currencies in the union.
  4. I've been wondering about this...I own calls on EUO. I anticipate some forced liquidation of the shorts before extinction. The longs were forced out of soybeans back in the late 80's. CBOT decided that the forced liquidation was 'in the best interest of the market.'