Forex Market History

The forex market has been with us thru out history. Ever since the middle ages different foreign currencies were being exchanged and throughout most of the forex market history this was considered to be a relatively safe activity as national currencies were supported through gold reserves.

However, over time, these gold reserves dwindled and this had a negative effect on the stability of the foreign currency.

Up until World War I currency exchange trading was very stable, but when the Gold Standard security was removed, this led to a period of increasing volatility within the market. The Great Depression of 1931 saw a definite downturn in trading and it was around this time that people generally viewed foreign currency trading as being undesirable and a high-risk.

World War II was to have an even larger impact on the global economy. Not only through terms of the many unfortunate lives lost, but due to the fact that this was such an immensely costly war. Consequently, something had to be done in an attempt to stabilize the worldwide economical situation.

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That something was known as the 'Bretton Woods Agreement' which was conceived in 1944 and this involved standardizing all currencies against the USD. At this time, a fixed rate was established at $35.0USD  per ounce of gold and all of this was intended to settle national economies and their currencies into a position where trading would be deemed as far more acceptable. With the emergence of the European Community (later the European Union), many member countries were not happy with their currency being placed against the US dollar.

In the early seventies, another agreement was attempted, known as the 'Smithsonian Agreement', but as Europe tried to pull further and further away from the US dollar, this was doomed to failure in 1973. Just two years after its introduction in 1971.

1973 saw the emergence of the 'free-floating' system that is still in operation today. Currency trading around this time was nothing like on the scale that it is today. It was not until the nineties that this market really seemed to spring into life and traders were falling over themselves to enter this exciting and ever-changing market.

The dawn of the internet era has made foreign currency trading even easier and more desirable. All forex trades and transactions can be carried out within the comfort of your own home and it is highly likely that we are only just starting to see the seedlings of growth in this market. As the foreign exchange market is springing to life world wide and a lot of people are making money at this. The forex way of making money seems to have re-invented itself over recent years and it strikes you as being an exciting and lucrative way of making money from home.

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