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When forex started?

The foreign exchange market, also known as forex, is the largest financial market in the world, with an estimated daily turnover of over $5 trillion. But when did forex actually start?

The origins of forex can be traced back to ancient times when people began trading goods and services with each other. However, the modern forex market as we know it today started in the 1970s.

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Prior to this time, the Bretton Woods Agreement was in place, which fixed exchange rates between countries and pegged the value of the US dollar to gold. This meant that the value of currencies was largely stable and predictable.

However, the system began to break down in the 1960s as countries struggled to maintain the fixed exchange rates. In 1971, President Nixon ended the convertibility of the US dollar to gold, effectively ending the Bretton Woods Agreement and allowing currencies to float freely.

This led to the birth of the modern forex market, as currencies could now be bought and sold based on their market value rather than being artificially fixed to a specific rate.

The first forex market was established in 1972 in Chicago, where currency futures were traded on the Chicago Mercantile Exchange. This allowed traders to hedge against currency risk by locking in a price for a future date, and also allowed speculators to bet on the future movement of currency prices.

In the 1980s, electronic trading platforms were introduced, allowing traders to buy and sell currencies electronically rather than having to physically go to a trading floor. This made forex trading more accessible and efficient, and led to a boom in the number of traders entering the market.

The 1990s saw further growth in the forex market, as the rise of the internet made it even easier for traders to access the market and for brokers to offer trading services online. This led to a significant increase in the number of retail traders, who could now trade forex from the comfort of their own homes.

Today, the forex market is a global, 24-hour market that is accessible to anyone with an internet connection. It is the largest financial market in the world, with an estimated daily turnover of over $5 trillion.

Forex trading has become increasingly popular in recent years, as more and more people seek to take control of their own investments and diversify their portfolios. However, it is important to note that forex trading carries a high level of risk, and traders should always do their own research and seek professional advice before investing.

In conclusion, while the origins of forex can be traced back to ancient times, the modern forex market as we know it today started in the 1970s when currencies were allowed to float freely. The market has since grown into the largest financial market in the world, with electronic trading platforms and the rise of the internet making it more accessible and efficient than ever before.

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