Forex, also known as foreign exchange or FX, is the largest decentralized financial market in the world. It involves the buying, selling, and exchanging of currencies at current or determined prices. The forex market operates 24 hours a day, five days a week, and is accessible to anyone with an internet connection, making it one of the most accessible markets for traders worldwide.
But who made forex? The history of forex can be traced back to ancient times, where people would exchange goods and services using different currencies. However, the modern forex market as we know it today was created by the Bretton Woods Agreement in 1944.
The Bretton Woods Agreement was a landmark international agreement signed in Bretton Woods, New Hampshire, by 44 countries that established the rules for commercial and financial relations among the world’s major industrial states. The agreement was designed to create a stable post-war global economic system by pegging the value of the US dollar to gold and other currencies to the US dollar.
The US dollar became the world’s reserve currency, and other countries pegged their currencies to the US dollar. This system was known as the Bretton Woods System, and it lasted until 1971 when the US government suspended the convertibility of the US dollar into gold, effectively ending the system.
The end of the Bretton Woods System marked the beginning of the modern forex market. Without a fixed exchange rate system, currencies began to float freely, and their values were determined by supply and demand in the market. This led to the creation of the interbank market, where banks and other financial institutions traded currencies with each other.
In the 1980s, technological advancements in computing and telecommunications led to the development of electronic trading platforms, which opened up the forex market to individual traders and investors. This allowed anyone with an internet connection to participate in the forex market, and it grew exponentially in popularity.
Today, the forex market is the largest financial market in the world, with an average daily trading volume of over $5 trillion. It is also one of the most liquid markets, with currencies being traded 24 hours a day, five days a week.
In conclusion, the modern forex market was created by the Bretton Woods Agreement in 1944, which established the rules for commercial and financial relations among the world’s major industrial states. The end of the Bretton Woods System in 1971 led to the creation of the modern forex market, where currencies float freely and their values are determined by supply and demand in the market. Technological advancements in the 1980s led to the development of electronic trading platforms, which opened up the forex market to individual traders and investors. Today, the forex market is the largest financial market in the world and is accessible to anyone with an internet connection.
