Why the United Kingdom must say 'No' By Rt Hon. In the era of plastic cards, it is unlikely that such dim tourists actually exist, but the image remains. More important are the trading costs associated with variable exchange rates. These are sometimes exaggerated.
Many companies have internal treasury operations anyway.
Further it has never been demonstrated that exchange rate volatility inhibits trade in practice. It has not been the Japanese experience that the marked fluctuations of the yen relative to the dollar and the European currencies have been a serious barrier to Japan's ability to increase exports. This indicates that even for investment, where exchange rate hedging is not a long term option, fixed exchange rates are less important than other factors such as costs, tax rates, labour relations, language and location. Also, the saving from a single currency must be set against the large costs of changeover. The British Retail Consortium estimates that converting to a single currency would cost retailers alone over 2 billion.