Forex Historical Background
Forex trading was born after an economical and historical catastrophe known as the Second World war. The representative of the most important western countries met in Bretton Woods, a small town in the United States, with the aim of inventing a revolutionary international currency system, which had the role of stimulating the economy, making international trade relationships and exchanges much easier.
The base concept was very easy: it was necessary to create a system in which all the currencies having part in it had a dollar correspondence, through fixed and predetermined exchange rates. Dollar depended upon a fixed rate too: a ounce of gold was meant to be 35 Dollars.
In order to guarantee the keeping of the currency values inside the currency market, the involved countries’ Central Banks declared they intended to keep the fixed prices, according with the Bretton Woods agreement. Their way of maintaining the same price was to balance demand and offer.
In 1973 this market strict act was repealed, because it obstructed the free fluctuation demand and offer prices. The Bretton Woods agreement was repealed and the US Dollar price was not bound to the its old gold value any more. Prices and rates start to fluctuate following demand and offer conditions. We could state that the modern interbank market we know today was born in the seventies.
In the last few decades Forex trading witnessed its increasing invested amount of money turning to so high levels that nobody could think to them before. Forex is nowadays the biggest and with the highest amount of invested money in the world.
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