History Of Forex
The word Forex (The Foreign Exchange Market) basically means trading. Although back in the early years, it wasn’t like it is today. The trading among different civilizations was also called the barter system. It is the exchange of goods and or services between different parties. Forex actually started with the trading of teeth, stones or metals; gold or silver and even feathers. As the world evolved, and countries and kingdoms became larger and larger, it was replaced with the currencies of the different countries.
It is said that the Babylonians get the credit for the use of paper currency, such as receipts and notes. Then they started accepting government I.O.U. Before World War II Forex trade was done by a certain country with the backing of gold reserves. The extremes were enormous because of such economic boom and recessions during this period. When this system was abandoned, due largely to the Great Depression, it became the turning point in modern day Forex.
The crucial period of Forex was between 1931 and 1973 when the market made a few changes because the activity in terms of speculation and trade was at the lowest. Controls and regulations were established to protect local interests as well as controlling the swings of the market which could be extreme. In 1944 the Bretton Woods Agreement was drawn up create the United States dollar to be the standard currency of the world. As well as the Bretton Woods Agreement there were a few others that played an important role in Forex and they were IMF, the GATT and the World Bank.
The arrival of the 1970’s found again another turning point for Forex. The Bretton Woods Agreement was overthrown and the United States currency was no longer the sole international currency. The materialization of the European currency, the Euro was established in 2002. The British has refused to change their currency to the Euro and still use the pound as their currency.
In Asia the United States has always been dominating force and did go under a turbulent phase in 1997 as many of the currencies of Asia were devalued against the dollar. In the world today many of the old Forex regulations and restrictions have been removed. There are now various establishments like dotcom companies and the World Wide Web, which these are separated from the central banks and the government associations that are very active in the Forex market. They do contribute considerably to the popularity and of course growth.
You can now go online and open up your own Forex account and actually do your trading there. Or like some people do they set up a dummy account and just practice trading with no risk of losing your money. Many do this to become familiar with the ins and outs of Forex. There are many different web sites that offer different online techniques for you to try. Or you can find someone that works in this field and they can assist you as well.
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