Important dates in the Forex History

U.S CAPITAL FOREX TRADING ACADEMY

Important dates in the Forex History


Early 20th Century

Only in the 20th century paper money start regular circulation. This happened by force of legislation, the efforts of central banks to manage money supplies, and government control of gold supplies.

Within a country, this fiat money is as good as any other form. Internationally, it is not. International trade has always demanded a money standard accepted everywhere.

Gold and silver provided such a standard for centuries. An official Gold Standard regulated the value of money for about a century, prior to the start of World War I in 1914.

1929

The dollar has been perceived as more of  a has-been, due to the Stock Market Crash and the subsequent Great Depression.

1930

The Bank for International Settlements (BIS) was established in Basel, Switzerland. Its goals were to oversee the financial efforts of the newly independent countries, along with providing monetary relief to countries with temporary balance of payments difficulties.

1931

The Great Depression, combined with the suspension of Gold Standard, created a serious diminution in foreign exchange dealings.

World War II

Before World War II, currencies around the world were quoted against the British Pound. World War II crashed the Pound. The only country unscarred by the war was the US. The US dollar became the prominent currency of the entire world.

1944

The United National Monetary and Financial Conference at Bretton Woods, New Hampshire discussed the financial future of  the post-war world. The major Western Industrialized nations agreed to a «pegging» of the US Dollar, which in turn was pegged at $35.00 to the troy ounce of gold. The future was designed to be stable, in part due to the tight governmental controls on currency values. The US dollar became the world’s reserve currency.

1957

The European Economic Community was established. 

1967

At the IMF meeting in Rio de Janeiro, the Special Drawing Rights (SDRs) were created. SDRs are international reserve assets created and allocated by the IMF to supplement the existing reserve assets.

1971

The Smithsonian Agreement, reached in Washington, D.C., had a transitional role to the free floating markets. The ranges of currencies fluctuations relative to the US dollar were increased from 1 percent to 4.5 percent band. The range of currencies fluctuating against each other was increased up to 9 percent. As a parallel, the European Economic Community tried to move away from the US dollar block toward the Deutsche Mark block, by designing its own European Monetary System.

In the summer of 1971, President Nixon took the United States off the gold standard, and floating exchange rates began to materialize.

1972

West Germany, France, Italy, the Netherlands, Belgium and Luxembourg developed the European Joint Float. Member currencies were allowed to fluctuate within 2.25 percent band (the snake), against each other and 4.5 percent band (the tunnel) against the USD.

1973

The Smithsonian Institution Agreement and the European Joint Float systems collapsed under heavy market pressures. Following the second major devaluation in the US dollar, the fixed-rate mechanism was totally discarded by the US Government and replaced by The Floating Rate.

1978

The International Monetary Fund officially mandated free currency floating.

1979

The European Monetary System was established.

1999

January 1st, 1999, the Euro makes its official appearance within the countries members of the European Union.

2002

January 1st, 2002, the Euro becomes the only currency and replaces all other twelve national currencies within the European Union and Monetary Market: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Austria, Portugal and Finland. 

TODAY

Today, supply and demand for a particular currency, or its relative value, is the driving factors in determining exchange rates.

Decreasing obstacles and increasing opportunities, such as the fall of communism and the dramatic growth of the Asian and Latin American economies, have created new opportunities for investors.

Increasingly vast amounts of foreign currencies began flowing into other countries banks. 

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