Forex has existed for centuries, when traders decided to begin the first exchange of currencies from different countries. However, the foreign exchange market the way we know it today is the latest of the financial markets. Origin of traces of forex trading history to centuries ago. Different currencies, and the need to exchange them had existed since the Babylonians. These are recorded with the first use of paper notes and receipts. Speculation hardly ever happened, and certainly the enormous speculative activity in the market today would have been frowned upon.

In 1967, a Chicago bank refused a college professor the name of Milton Friedman a loan in pound sterling because he had intended to use the funds to short the British

currency. To be priced Friedman, who had seen Sterling is too high against the dollar, wanted to sell the currency, then later buy it back to repay the bank after the currency declined, thus making a quick profit. The bank's refusal to grant the loan was due to the Bretton Woods Agreement, established in earlier than twenty years, which fixed national currencies against the dollar, and set the dollar at 35 dollars per ounce of gold.

Bretton Woods Agreement, established in 1944, the international monetary stabilization aimed at preventing money from fleeing across the States before, and restricting speculation in the world's currencies. Prior to the agreement, the gold exchange standard - prevailing between 1876 and World War I - dominated the international economic system under the gold exchange, currencies experienced a new era of stability and they were backed by the gold price. And abolished the old practice used by kings and rulers of debasing the money is arbitrary and cause inflation.

But the gold exchange standard did not lack errors. Slowed with the economy strengthened, it is importing from abroad, significantly before it is down its gold reserves required to support the funds, and therefore the money supply will shrink, interest rates rose and economic activity to the extent of recession. In the end, the prices of goods reached the bottom, appearing attractive to other countries, that could speed up the purchase of the fun that has been injected the economy with gold until it increased its money supply, and a campaign to reduce the interest rate and returning wealth to the economy. Prevailed in such boom-bust patterns during the gold standard until the outbreak of World War I, the flow of trade and free movement of gold.

After the war, was founded at Bretton Woods, where participating countries agreed to try to preserve the value of their currency with a narrow margin against the U.S. dollar and an equivalent rate of gold as needed. Countries were prohibited from devaluing their currencies to benefit their foreign trade and were only allowed to do so in order to reduce the value of the currency for a period of less than 10%. In the 1950s, and the size of the expanding international trade led to massive movements of capital resulting from the construction after the war. Which have destabilized the foreign exchange rates and the setting in the Bretton Woods institutions.

Was dropped from this agreement at the end of the day in 1971, and the dollar no longer convertible into gold. By 1973, put the currencies of major industrialized more freedom, as well as controlled mainly by the forces of supply and demand. Prices were floated daily, with volumes, speed and price volatility all increasing throughout the 1970s, which led to new financial instruments, market deregulation and trade liberalization.

In the 1980s, movements of capital across borders accelerated with the emergence of computers and technology, and market expansion by reaching Asia, European time zones of America. Bombed the transactions in the foreign exchange of about 70 billion dollars a day in the 1980s, to more than 1.5 trillion dollars a day two decades later.

The bombing of Euro market

There is a great incentive to speed up Forex trading is rapidly evolving in the Eurodollar market, where U.S. dollars deposited in banks outside the United States. Similarly, Euro markets are those where assets are deposited outside the currency of origin. Eurodollar market, which is ranked first came into existence in the 1950s when Russia's oil revenues d - all in dollars - was deposited outside the United States for fear of frozen by U.S. regulators. That gave leading to accumulation of foreign banks and the wide range of dollars outside the control of U.S. authorities. The U.S. government imposed laws to restrict dollar lending to foreigners. Euro markets were particularly attractive because it was much less regulations and offered higher yields. From the late 1980s and beyond, the United States began to borrow abroad, and create markets in the euro useful center for holding excess liquidity, providing short-term loans and financing imports and export companies.

London is, remains the principal offshore market and. In the 1980s, and became the key center in the Eurodollar market when British banks began lending dollars pounds for an alternative to maintain their leading position in global finance. UBS in London 'the convenient geographical location (operating during Asian and American markets) is also an active role in preserving its dominance in the Euro market.