The foreign exchange market, also known as the forex market, is a global decentralized market where currencies are traded 24 hours a day, five days a week. The forex market is the largest financial market in the world, with an estimated daily turnover of over $5 trillion. It is a platform where currencies are bought and sold by individuals, institutions, and governments. But when did the forex market open?
The forex market opened on April 2, 1973, when the Bretton Woods Agreement was abandoned. The Bretton Woods Agreement, which was signed in 1944, fixed the exchange rate of currencies to the US dollar, which was in turn fixed to gold. This system was called the gold standard. However, the gold standard was abandoned in the early 1970s due to a number of factors, including the high cost of maintaining the system and the increasing economic power of other countries.
With the abandonment of the gold standard, currencies were allowed to float freely against each other. This meant that the exchange rate between two currencies would be determined by the market forces of supply and demand. The forex market was created to facilitate this new system of floating exchange rates. The market opened on April 2, 1973, with the major currencies of the world being traded against each other.
The forex market operates 24 hours a day, five days a week, beginning on Monday morning in Sydney, Australia, and ending on Friday evening in New York City. This allows traders to participate in the market at any time of the day or night, regardless of their location. The forex market is also a highly liquid market, with a large number of buyers and sellers participating in trades at any given time. This high level of liquidity makes it easy for traders to enter and exit positions quickly and easily.
The forex market is also highly volatile, with exchange rates changing rapidly in response to economic, political, and social events around the world. This volatility makes the forex market a popular choice for traders looking to make quick profits. However, it also makes the market highly risky, as traders can lose money just as quickly as they can make it.
In conclusion, the forex market opened on April 2, 1973, when the Bretton Woods Agreement was abandoned. Since then, the market has grown to become the largest financial market in the world, with an estimated daily turnover of over $5 trillion. The forex market operates 24 hours a day, five days a week, and is highly liquid and volatile. Traders should be aware of the risks involved in trading forex and should always conduct thorough research before making any trades.
