Most major currencies were backed by gold during the nineteenth century, which encouraged economic stability and international trade among the various nations. Although this gold exchange standard prevented rulers from debasing their currencies to trigger inflation, it did promote cycles of boom and bust through imports and exports until World War I severely curtailed the flow of goods across international borders.
After the war, the foreign exchange market grew rapidly through the 1920s until curtailed by the Great Depression. The 1929 stock market crash devalued the U.S. dollar, a blow from which it did not recover until it was revitalized by the enormous economic boom of the Second World War.
In 1944, a multinational economic conference in New Hampshire drafted and signed an agreement known as the Bretton Woods Accord. Intended to create a stable post-war market for economic recovery, the Accord established the International Monetary Fund (IMF). It also pegged the value of most major currencies to the U.S. dollar with only a narrow margin for fluctuations, and the dollar itself was pegged to the gold standard at the price of $35 per ounce.
The Accord worked well for years, although the growth of international trade strained the agreement several times. But in 1971 severe currency fluctuations led to the Smithsonian Agreement, which allowed for greater variation among the world’s currencies.
The reprieve was short-lived. In 1973, U.S. President Richard Nixon abandoned the gold standard as no longer workable. Pegged currency standards collapsed beneath market pressure, and currency values were determined by the traditional market forces of supply and demand.
With deregulation, the forex market grew rapidly both in volume and in volatility. The free-floating system of currency values was officially adopted in 1978, although some smaller countries continue to this day to peg their currencies to that of their nearest large trading neighbour. Semi-pegged currencies were abandoned with the European Monetary System in 1993, following the Bank of England’s dramatic but doomed attempt to support the pound against foreign currency speculators.
By the 1980s approximately U.S. $70 billion per day were being traded on the foreign currency market. But increased usage of technology and the explosion of the Internet led to trading across time zones and around the globe, and the market grew further, attracting the attention of even more speculators, including banks, hedge funds, major companies, and well-heeled individual investors.
In 2000, the U.S. Congress passed the Commodity Futures Modernization Act, which created the retail forex market and brought currency trading within the reach of the average investor. Many other nations have followed suit.
The forex market has continued to grow, with roughly U.S. $1.5 trillion traded on the average day. Of these trades, almost half were executed electronically, although many large institutions, such as banks and major corporations, continue to do their trading via telephone.
By volume of trades, the AUD/USD is the fourth most traded currency pair globally, and all trades involving the Australian dollar averaged U.S. $103 billion per day in 2004, double the amount of 2001. The Australian forex market is the world’s seventh largest, behind the United Kingdom, the United States, Japan, Singapore, Germany, and Hong Kong.
source : http://forextradings.com.au
Tidak ada komentar:
Posting Komentar