Forex, or the Foreign Exchange Market, is the largest and most liquid financial market in the world. It is where individuals, businesses, and financial institutions can buy, sell, and exchange currencies. But when was forex open? To answer this question, we need to look back at the history of forex and how it has evolved over time.
The origins of forex can be traced back to ancient times when traders would exchange goods and services across different regions and countries. However, it wasn’t until the 19th century that the modern forex market began to take shape. During this time, countries began to standardize their currencies and establish fixed exchange rates.
The Bretton Woods Agreement, signed in 1944, marked a major turning point in the history of forex. The agreement established a new international monetary system based on the US dollar, which was pegged to the price of gold. Other currencies were then pegged to the US dollar, creating a fixed exchange rate system.
This system worked well for several decades, but it began to break down in the 1970s. The US dollar was overvalued, and other countries began to demand that the US government devalue their currency to make their exports more competitive. In 1971, President Nixon ended the convertibility of the US dollar to gold, effectively ending the Bretton Woods system.
This move led to the creation of a floating exchange rate system, where currencies were allowed to fluctuate freely based on supply and demand. The modern forex market as we know it today was born. The first electronic trading platform for forex, called the Reuters Dealing System, was launched in 1981.
Since then, the forex market has grown exponentially. It is now a 24-hour market, open five days a week. This means that traders can buy, sell, and exchange currencies at any time, anywhere in the world. The market is open from Sunday evening through Friday evening, with trading taking place in three major sessions: the Asian, European, and North American sessions.
The Asian session, which begins on Sunday evening, is dominated by trading in the Japanese yen, Australian dollar, and New Zealand dollar. The European session, which begins at 8:00 am GMT, is the most active session, with trading in the euro, British pound, and Swiss franc. The North American session, which begins at 1:00 pm GMT, is dominated by trading in the US dollar and Canadian dollar.
One of the main reasons why the forex market is so popular is because it offers traders the opportunity to profit from both rising and falling markets. This is because currencies are always traded in pairs, so when one currency is going up, another currency is going down.
Another advantage of the forex market is its liquidity. With an average daily trading volume of over $5 trillion, it is the most liquid financial market in the world. This means that traders can enter and exit positions quickly and easily, without having to worry about liquidity issues.
In conclusion, the modern forex market was born in the 1970s, after the collapse of the Bretton Woods system. Since then, it has grown into the largest and most liquid financial market in the world, open 24 hours a day, five days a week. Traders from all over the world can participate in the market and profit from both rising and falling markets.
