Origins of Forex Market

Up till war I, currencies were pegged to precious metals, like gold and silver. however the system folded and was replaced by the Bretton Woods agreement when the second war. That agreement resulted within the creation of 3 international organizations to facilitate economic activity across the world. They were the International money (IMF), General Agreement on Tariffs and Trade (GATT), and also the International Bank for Reconstruction and Development (IBRD). The new system conjointly replaced gold with the U.S. dollar as peg for international currencies. The U.S. secure to keep a copy dollar provides with equivalent gold reserves.

But the Bretton Woods system became redundant in 1971, once U.S. president Chief Executive proclaimed “temporary” suspension of the dollar’s interchangeability into gold. Currencies square measure currently liberated to select their own peg and their worth is set by provide and demand in international markets.

KEY TAKEAWAYS

Forex market could be a market during which participants should purchase, sell, exchange, and speculate on currencies.

It operates 24X7, 5 days the simplest way and is chargeable for some $5 trillion in commerce turnover activity.