Trading, as we use the term today, has been in practice since the era of Babylonians. Yes, it’s true! Although at that time, it was referred to with a different name altogether…
That’s right. During earlier times, goods were exchanged in return for goods. And slowly, people started to exchange goods in return for foreign currencies of that time to make their trade a lot easier.
History of Currency or Forex trading can be traced back to the Middle Age times. It is believed that an international investment banker developed the method of using checks and bills to trade. However, starting from the middle ages, a lot has changed and evolved, creating the biggest currency trading market in the world today.
By the late1930s, London was being considered as the world’s foremost foreign exchange center. One of the main reasons behind this was that during that time, the British pound was regarded as the world’s standard trading exchange.
But the scenario took a dramatic turn after the Second World War, when the British economy was almost smashed resulting in the rise of the United States dollar. The USD then started to climb the path to success as it rose to become the world’s major trading as well as reserve currency.
In July 1944, the Bretton Woods agreement was attained on the application of USA.
As a result to the Bretton Woods contract, a system of fixed exchange rates was decided, which resulted in partially re-establishing the Gold Standard and fixing the USD price at $35.00 per 1 ounce of Gold.
While the USD was priced against Gold, the other major currencies were set up against the USD itself.
The Second World War and the series of events which followed are mainly believed to have played an instrumental role in shaping today’s Forex market situation.
Early 1980’s saw London becoming the key center of the Euro-dollar market, and till today, London efficiently remains the major offshore market.
From back in the year 1978, when Forex trading displayed revenue of about 5 billion US dollars on per day basis, till date, the per day Forex trading turnover has now crossed the figure of a whooping 1.5 trillion US dollars.
Forex Trading History
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