THE HISTORY OF FOREX

When foreign trade began, it was not an international trade market. This follows from the Bretton Woods agreement of 1944, which stated that foreign currencies would be fixed against the dollar, which was valued at $35 per ounce of gold. This precedent was first put into practice in 1967, when a Chicago bank refused to finance a loan to a professor in pounds sterling. Of course, their intention was to sell the currency, which they felt was too high against the dollar, and then buy it back when the value had dropped, making a quick profit.
After 1971, when the dollar was no longer convertible into gold and the domestic market was stronger, the Bretton Woods agreement was abandoned, and the currency conversion process became more variable. This allowed for greater support in foreign markets, and the United States and Europe began a strong trading relationship. In the 1980s, market timing and usage was expanded through the use of computers and technology to include Asian time zones as well. At that time, foreign exchange amounted to about $70 billion a day. Today, some twenty years later, the level of trading has skyrocketed, with the equivalent of about $1.5 trillion a day.
Originally, trading across international lines was more difficult, with several different currencies involved across Europe. Although the major players in the European market were deeply involved and were veterans of international trade by the time other markets joined in, there were more currencies to track - the franc, the pound, the lira and many more - than was reasonable. With the birth of the European Union in 1992, the foundations were laid for a single currency that would be used in most of Europe, and the euro was finally established and put into circulation in 1999.