Some History of Forex Market
From earliest times, travel and the exchange of goods such as spices and other treasures between countries and continents fostered the humble beginnings of foreign trade and the exchange of a money equivalent for that trade. Between 1876 and World War 1, the international standard for economic trade and stability was based on the world currencies being valued against gold reserves.As national gold reserves depleted, the boom/bust cycle of government spending, interest rate escalations and economic instability surfaced. World War 1 interrupted the free movement of gold and a new way of global economic relationships became necessary.
Found this a few weeks ago. The writer described what it's like to trade a decade ago. Worth reading.
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The historical evolution of foreign exchange markets can be compartmentalized into 3 distinct phases namely the gold exchange period, followed by the Bretton Woods Agreement, to its current setting.
The gold exchange standard ruled over international economic system between 1876 and World War I. This was a fairly stable system wherein currencies were supported by the price of gold.
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