History of Forex

Money in one form or the other has been used by man for centuries. At first it was only gold or silver coins. Goods were traded against other goods or against gold. So, the price of gold became a reference point. But as the trading of goods grew between nations, moving quantities of gold around places to settle payments of trade became risky and time consuming. Therefore, a system was sought by which the payment of trades could be settled in the seller's local currency. The important dates in the Forex History are

Early 20th Century

Only in the 20th century paper money start regular circulation. This happened by force of legislation, the efforts of central banks to manage money supplies, and governmeny control of gold supplies.

1929
The dollar has been perceived as more of a has-been, due to the Stock Market Crash and the subsequent Great Depression.

1930
The Bank for International Settlements (BIS) was established in Basel, Switzerland. Its goals were to oversee the financial efforts of the newly independent countries, along with providing monetary relief to countries with temporary balance of payments difficulties.
1931
The Great Depression, combined with the suspension of Gold Standard, created a serious diminution
in foreign exchange dealings.

World War II
Before World War II, currencies around the world were quoted against the British Pound. World War II crashed the Pound. The only country unscarred by the war was the US. The US dollar became the prominent currency of the entire world.

1944
The US dollar became the world's reserve currency.

1957
The European Economic Community was established.

1967
Special Drawing Rights (SDRs) were created.

1978
The International Monetary Fund officially mandated free currency floating.

1979
The European Monetary System was established.

1999
January 1st, the Euro makes its official appearence within the countries members of the European Union.

There are many other important dates in the forex history.Supply and demand are the driving factors fr determining exchange rates.

Players in the Forex market

Central Banks
Banks
Interbank Brokers
Retail Brokers
Commercial Companies
Hedge Funds
Investors and Spectators.