The history of the foreign exchange market

knowledge forex trad forextradingwebsiteonlineg site skills, in 1967, a Chicago bank refused to provide a pound loan to a university professor named MiltonFriedman, because he wanted to use the fund for short British poundsFriedman Mr. perceived that the pound to forextradingbrokerwebsite ratio was too high, want to sell the pound, and then wait for the pound to fall and then buy back the pound to repay the bank, thus This agreement fixed the cashback forex rate of national currencies against the U.S. dollar and set the ratio of the U.S. dollar to gold at $35 per ounce. The Bretton Woods agreement was signed in 1944 and sought to achieve international monetary stability by preventing currency flight between countries and limiting international currency speculation. Before this agreement, the gold exchange standard dominated the international economic system between 1876 and World War I. In the gold exchange standard, currencies reached a new stage of stability with the support of the price of gold The gold exchange standard abolished the old era of kings and rulers arbitrarily devalued the currency and caused inflationary behavior However, the gold exchange standard is not perfect As a countrys economic strength grows, it will import a lot of goods from abroad until the gold exchange standard is not perfect. The result is that the money supply tightens, interest rates rise, and economic activity slows to a recession. Eventually, commodity prices hit rock bottom, gradually attracting other countries to come and buy the countrys goods in large quantities. The boom-bust pattern continued throughout the gold standard era until the outbreak of World War I interrupted the flow of trade and the free flow of gold. After several stormy wars, the Bretton Woods agreements were put in place and the signatories agreed to try to maintain the exchange rate of their currencies against the dollar and, if necessary, the corresponding rate against gold, allowing only small fluctuations. The agreement was finally abrogated in 1971, and the dollar would no longer be convertible into gold to In 1973, the major industrial countries of the currency exchange rate floating more freely, mainly by the foreign exchange market money supply and demand regulation With the volume of transactions, the speed of transactions and price volatility in the 1970s, the overall growth, the ratio of daily floating, new financial instruments gradually introduced, market liberalization and trade liberalization can be achieved In the 1980s, with the computer and related The advent of technology, cross-border capital flows accelerated, the Asian, European and U.S. continental time zone markets into one foreign exchange transactions from the mid-1980s about 70 billion U.S. dollars per day soared to 20 years later todays 1.5 trillion U.S. dollars per day The expansion of the European market One of the main contributing factors to the boom in foreign exchange transactions is the rapidly developing European dollar market; in the European dollar market, the dollar is deposited in banks outside the United States Similarly, the European market is a market in which assets are deposited outside the country of origin of the currency The European dollar market first took shape in the 1950s when Russia deposited its oil proceeds (in dollars) outside the United States to avoid the risk of having its dollar deposits frozen by the U.S. government This created a huge offshore dollar vault outside the control of the U.S. government The U.S. government enacted laws restricting the lending of dollars to foreigners Since the late 1980s, after U.S. companies began borrowing from offshore markets and found European markets convenient for holding excess liquidity, providing short-term loans, and financing imports and exports, London was (and still is) the main offshore market. In the 1980s, British banks, in order to maintain their dominant position in the global financial industry, began lending in U.S. dollars as an alternative currency to the British pound, thus becoming the center of the European dollar market Londons convenient location (between the Asian and American markets) also helped the region maintain its dominant position in the European market Previous 1 2