History of Foreign Exchange Part 2

History of Foreign Exchange Part 2 | See: Part 1

Floating Exchange Rates

According to the announcement made in 1971 by Richard Nixon, United States would not replace dollar for gold any more. This was the start of  Bretton Woods system disintegration. And later in 1976, due to the Jamaica agreement Bretton Woods system was completely collapsed leading to a system of floating exchange rates.
Since then, depending on the power of economy that prints the money,  currencies fluctuate and have floated in value against one another.  The value of currencies is affected by various factors like interest rates, retail sales, housing numbers, non-farm payroll, etc.

The Forex Market

After the abandoning of Bretton Woods system, institutional investors and banks were the only leading players in the Forex market. In order to trade one was to have great sum of money.
In 1994  Forex exchange appeared already online and gave the necessity of opening Forex brokers. Forex brokers made it possible for common individuals to participate too, as the latters  could trade with  leverage. There was no necessity of  putting up a great sum of money for market trading.

The Market Today

At present Forex market is considered to be the largest financial market on the earth. More than $4 trillion a day pass through the market by its participants. Then, why to give so much importance to the history of foreign exchange? After having studied the long way of  “Gold Standard” , we can say that it would be nice to get a minute fraction of that $4 Trillion each day. Now it’s time to look through the site and learn about Forex trading to be able to make a profit.
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