HISTORY OF FOREX
A look at the history of Forex and the analysis of the foreign exchange market and the history of the foreign exchange market.
You’ve ever wondered about the history of Forex? We will cover all aspects of the history of the foreign exchange market and explain important aspects on the history of Forex.
The history of the foreign exchange market began in 1875 with the birth of monetary gold pattern. Before 1875, the countries mainly used gold and silver as a form of international payment. Payments using gold and Silver were hampered by its devaluation due to external factors such as the increase in the discovery of new deposits, which led to a change in supply and demand. This factor would change the history of operations in Forex forever.
The objective of the implementation of the pattern one was the guarantee any currency, by a certain amount of gold. Currencies were backed by gold measured in ounces. Countries needed large gold reserves to support the currency demands. The price of an ounce of gold difference between two different currencies became the exchange rate of foreign currency for these two coins. This Forex story changed from the birth of an international standard by which the foreign currency exchange could take place between countries. Rupture of the monetary gold pattern occurred with agitation policy during the first world war, when Germany forced the main European powers to focus on military projects. This financial “leak” on Europe resulted in a lack of gold that could back up the excess money printing and determined a new change in the history of the FX market.
The abolition of the monetary gold standard system left a vacuum in the currency exchange method and changed the path of history of Forex. This issue was a matter of concern to the allies and is then that a Convention was held at Bretton Woods, New Hampshire in July 1944 to solve this problem. This Convention resulted in the Bretton Woods monetary system. This new Bretton Woods monetary system defined the new history of the Forex market: * a new method of obtaining a rate fixed currency exchange extranjera.* the gold standard would be replaced by the dollar ($) as the main cambio.* the dollar coin would be the only currency that would support the oro.*El home of three international authorities to protect all foreign transactions.
The Bretton Woods monetary system only lasted for about 25 years and ended mainly since it wanted make the dollar the only currency backed by gold. The us. UU announced the end of the change in gold by the US dollar by foreign banks on August 15, 1971.
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