THE financial sector will initially experience the biggest impact under monetary union. Banks are set to lose a lucrative source of revenue while many traders and analysts are worried about their jobs.

The facts look stark. Traders who play a currency which will go into the single currency will have to find something else to do or lose their jobs.

Privately, many traders admit their jobs and futures are very uncertain.

"It's a bit like working in a British coal mine in the 1970s, we're in a dying industry," one trader quipped. They do not relish the choice of moving into what they perceive as the more boring areas of banking after the excitement of the foreign exchange markets.

However, not all foreign exchange traders will lose their jobs. At the moment most either work on corporate desks, buying and selling various currencies for their corporate clients or on proprietary desks where the banks buy and sell on their own account.

It is the corporate traders who look to be most insecure in the short term. When the pound enters the euro, particularly if Britain is also involved, most companies would no longer need to buy and sell other European currencies. Of course, there would still be a substantial market in trading the euro against the dollar and the yen. If Britain stays out then large scale trading between the euro and sterling can also be expected. However, smaller centres like Dublin could see large reductions in trade.

Some of the more optimistic traders believe that the emphasis would switch to Far Eastern and other currencies. They point out that many of their larger pension fund clients already require yen and other Far Eastern currency transactions. There is no reason why they should not begin to trade these themselves on a proprietary basis, they say. If you are in the market there is no reason you cannot quote a price the same as anyone in London or New York," one trader said.

However, the analysts and managers are less enthusiastic. One director said it would be completely unrealistic for anyone to think they can wait until January 1999 and then start trading new currencies.

The other problem is that in Dublin the traders have the advantage of seeing all the flows in the markets which gives them a good handle on the situation, that will not be available to them in other markets.

Of course, the market has already been consolidating. Most of the core European currencies have been trading so closely together over recent years that many traders have already found themselves out of a job. Some have already moved to Finex, Dublin's future exchange in the IFSC and more look set to follow.

Others are likely to move to London which looks set to retain its status as a global foreign exchange centre. Others will be offered redeployment. The Euro would offer much greater opportunities to develop sophisticated hedging products than the pound.

The banks themselves would also suffer. The total turnover on the Dublin foreign exchange market is frequently over £1.5 billion a day. Even without monetary union the volume is likely to fall. Ireland's foreign exchange volume fell between 1992 and 1995 as much of the business gravitated to London, one of the world's most liquid markets.