Foreign exchange history are often viewed as a series of solutions that allowed countries to issue their own currency and to conduct their own monetary policy while also allowing international trade to be conducted by providing a way of exchanging one currency for an additional consistent with the rate of exchange between them, which was either agreed-upon or set by the market.
The first Forex market was established in Amsterdam, roughly 500 years ago. This possibility to freely trade currencies helped stabilize currency exchange rates. From Amsterdam, Forex trades throughout the entire world were initiated.
240 years ago, 1875, the Gold Standard was introduced. Within the Gold Standard, a rustic was limited to only minting the maximum amount national currency as there was Gold held in reserves. The Gold Standard had the aim to ensure the worth of a currency. After the primary war , countries had to print extra money so as to finance their expenses, which signals the top of the Gold Standard.
By 1913, the amount of Forex trading firms rose from 3 to 71 within only 10 years in London. 50% of all Forex transactions were made in British pound In 2013, the Pound Sterling was the 4th most traded currency after the US-Dollar, the EURO and therefore the Japanese Yen.
During World War II, the Bretton Woods system was introduced. It was a successor of the failed Gold Standard.