Since the start of the foreign exchange market, monetary investments have risen to an astounding scale. But did you know how it came to be? Looking back into the beginnings of this trade can give you a clearer perspective before engaging into it.
The following is a rough summary of the history of this trade meant for those who are preparing themselves to enter forex trading.You can take a look at True ECN for more high quality information about forex.
The financial market gave birth to the idea that gold should be the world's most fundamental monetary system. So what happens is that countries fixed the value of their corresponding currencies to be equal to an ounce of gold, and the fluctuating price of gold among a pair of currencies became the onset of currency exchange.
The beginnings of currency exchange dipped when, during World War I, the two major European powers did not have enough hold to trade during that time due to their military projects, so the gold standard caved in.
It resumed to progress again but once more went down during the second World War, especially since most of the countries did not want to take part in such a trade. Nevertheless gold still remained as the most fundamental means of financial value.
The Bretton Woods System changed that when in 1944 there was an agreement that the US dollar should take the place of the gold standard in terms of basic reserve currency. In other words, the only currency that can substitute for gold would be the U.S. dollar. You should go and check out our website for more information:IC Markets.
The Bretton Woods System ended in 1971 when the United States affirmed that it has put an end to exchanging gold for US dollars that were kept in foreign reserves. In 1976, due to the end of the Bretton Woods System, floating foreign exchange rates more acceptable worldwide. Thus the modern day Forex started its first course. It was in the mid 1990s when it started to broadly trade electronically.
At present, with an average trading volume of 2.3 trillion dollars, Forex stands as the giant in the world of investment.
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