Key Events In The History Of Forex
Trade, defined as the barter of goods, was existent even in the past. A look at the history of Forex would show that money trading undeniably started a long, long time ago when goods were valued and traded for other goods. This trading process meant that a particular value was set to serve as the basis of the exchange.
The history of Forex specifically that of money trade can be traced back to the Middle Ages when coins and paper I.O.U's were very dominant in the society. It is said that the basis of currency exchange is first seen in this era. The development of money trading continued through the First World War and this time currencies were pitted against the value of gold. However, this system did not seem to work since most financial institutions did not have enough gold to trade for the abundance of paper money which led to economic and political instability and inflation.
Because of this failure, the history of Forex continued with the creation of the Bretton Woods Agreement, which initiated by the US, imposed a control on the market to make sure that governments were to be responsible for their economy. The Bretton Woods Agreement was able to achieve a standard of fixed exchange rates that helped in the stabilization of the world's different currencies especially since World War II has just ended, with the dollar as its base currency.
However, there came a time when the US Dollar was not suitable enough to be considered as the only international currency since the American economy was suffering due to trade deficits. This signified the emergence of other international currencies that is very well suitable for the international market. The history of Forex does not end there because several developments have happened to achieve the global status that it has today. At present, the foreign exchange market is flourishing into a big trading arena - it is even considered as the world's biggest playground for financial institutions and investors, alike. Much is to be gained with the current foreign exchange market, if one just knows how to play his cards right.
