It is to express the value of goods and services by other commodities. This system is called barter or swap. Carry goods for exchange was exhausted, so I started using some of the economies of certain goods, such as feathers, stones polished, distinctive metals such as gold and silver as a means of exchange. The first coins were made of gold and silver. During the Middle Ages, economies started using the stock exchange value of a promise to pay the debt or receivables. However, the forex industry itself is the latest among the financial markets.
During the last century, the foreign exchange market has seen some dramatic changes. In 1944, he was the founding of the foreign exchange system after World War II as a result of holding a multi-national conference held in Bretton Woods, New Hampshire. This system remained in place until the early seventies.
Before World War I, the central banks supported their currencies through conversion into gold. You can convert paper money into gold on demand to the bank. Because it was unlikely that all paper money will ask holders of gold at the same time, banks were only need to maintain a specific amount on hand to handle a normal exchange of requests (gold reserves). Therefore, the amount of money suspense was over relatively to the amount of actual gold in hand. During times of crisis, when confidence in the financial system is low, there was a large amount of currency holders asking for conversion into gold at the same time, especially if more than gold in Hozh bank. Political instability and inflation result is to increase the supply of paper money (IOUs), relative to gold reserves. Foreign currencies have been affected by such events due to their impact on the economy
After that, foreign exchange controls introduced to control the supply and demand forces. In July 1944, at the end of World War II, he met the allied countries (the United States, Britain, and France) in the financial conference and criticism of the United Nations, which was held in Bretton Woods, New Hampshire. The desire global economic system that would stabilize the volatility in foreign exchange markets, which previously occurred structure. The result was the Bretton Woods agreement which set a system to link the currency and the establishment of the International Monetary Fund. Agreement proved to the US dollar at $ 35 per ounce of gold and proved other currencies against the dollar.
After that, there were other changes that have occurred with respect to the agreement. During the sixties volatility between different countries' economies become more extreme, which made it difficult for some to maintain the stability of the system. Bretton Woods collapsed in August 1971, when President Nixon suspended the gold standard for conversion. The dollar has lost its attractiveness international single currency due to the impact of the growing trade deficit and the deficit in the government budget.
After the Bretton Woods agreement Smithsonian agreement came in December of the year 1971. This agreement was similar to the Bretton Woods agreement but allowed a larger range of fluctuation of the currency. In 1972, the European community tried to move away from its reliance on the dollar. The Joint European Agreement by West Germany, France, the Netherlands, Belgium and Luxembourg. This agreement was similar to the Bretton Woods agreement, but allowed a greater range of fluctuation in the value of the currency.
Both agreements made mistakes similar to the Bretton Woods agreement, and by 1973, all of which collapsed. Signifies the collapse of the Smithsonian agreement and the common European agreement in 1973, the official switch to the free system of volatility. This happened by default, where there were not new agreements to replace them. Governments were now free to link their currencies, or semi-linked or allowing them to fluctuate freely. In 1978, volatility has formally asked the free system.
Continued pursuit of currency stability in Europe with the signing of the Maastricht Treaty in 1991. This was not only to be the reform of the exchange rate, but also to replace many of them already with the euro in 2002. The size of the forex market now ahead of any other market investments. It is estimated that more than $ 3 trillion traded daily.
During the last century, the foreign exchange market has seen some dramatic changes. In 1944, he was the founding of the foreign exchange system after World War II as a result of holding a multi-national conference held in Bretton Woods, New Hampshire. This system remained in place until the early seventies.
Before World War I, the central banks supported their currencies through conversion into gold. You can convert paper money into gold on demand to the bank. Because it was unlikely that all paper money will ask holders of gold at the same time, banks were only need to maintain a specific amount on hand to handle a normal exchange of requests (gold reserves). Therefore, the amount of money suspense was over relatively to the amount of actual gold in hand. During times of crisis, when confidence in the financial system is low, there was a large amount of currency holders asking for conversion into gold at the same time, especially if more than gold in Hozh bank. Political instability and inflation result is to increase the supply of paper money (IOUs), relative to gold reserves. Foreign currencies have been affected by such events due to their impact on the economy
After that, foreign exchange controls introduced to control the supply and demand forces. In July 1944, at the end of World War II, he met the allied countries (the United States, Britain, and France) in the financial conference and criticism of the United Nations, which was held in Bretton Woods, New Hampshire. The desire global economic system that would stabilize the volatility in foreign exchange markets, which previously occurred structure. The result was the Bretton Woods agreement which set a system to link the currency and the establishment of the International Monetary Fund. Agreement proved to the US dollar at $ 35 per ounce of gold and proved other currencies against the dollar.
After that, there were other changes that have occurred with respect to the agreement. During the sixties volatility between different countries' economies become more extreme, which made it difficult for some to maintain the stability of the system. Bretton Woods collapsed in August 1971, when President Nixon suspended the gold standard for conversion. The dollar has lost its attractiveness international single currency due to the impact of the growing trade deficit and the deficit in the government budget.
After the Bretton Woods agreement Smithsonian agreement came in December of the year 1971. This agreement was similar to the Bretton Woods agreement but allowed a larger range of fluctuation of the currency. In 1972, the European community tried to move away from its reliance on the dollar. The Joint European Agreement by West Germany, France, the Netherlands, Belgium and Luxembourg. This agreement was similar to the Bretton Woods agreement, but allowed a greater range of fluctuation in the value of the currency.
Both agreements made mistakes similar to the Bretton Woods agreement, and by 1973, all of which collapsed. Signifies the collapse of the Smithsonian agreement and the common European agreement in 1973, the official switch to the free system of volatility. This happened by default, where there were not new agreements to replace them. Governments were now free to link their currencies, or semi-linked or allowing them to fluctuate freely. In 1978, volatility has formally asked the free system.
Continued pursuit of currency stability in Europe with the signing of the Maastricht Treaty in 1991. This was not only to be the reform of the exchange rate, but also to replace many of them already with the euro in 2002. The size of the forex market now ahead of any other market investments. It is estimated that more than $ 3 trillion traded daily.
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