Forex History

Since the 1970s, faced with the globalization of world trade, international financial transactions became much more common, this compared to the previous 50 years. This phenomenon was slowly transforming the foreign exchange market or forex, and not only in terms of volumes traded,

but also in their structure, function and method of transacting. Among the main structural changes in the currency market, we can mention the following:

Deregulation a- exchange market and financial

Several States throughout the world, eliminated controls and the implementation of a command economy. The current rules on economic issues are only implemented in order to stimulate sustainable economic growth, and consequently vitalize the financial system. This phenomenon resulted in increased competitiveness, both nationally and internationally, especially among major financial institutions.

b- Changes to the form of savings and investment, the effect of globalization

Faced with this phenomenon, financial institutions and mutual funds worldwide investments managed more committed to their investment objectives. In addition to the strategic vision of diversification of investments, investments can now be placed nimbly between nations, particularly the foreign exchange market achieves these purposes efficiently.

If in our world there would be only one world currency, there would be no foreign exchange market or forex. However, our reality is totally different because there are hundreds of sovereign states with a particular legal tender currency. Thus the foreign exchange market plays a key role in facilitating trade between nations. Without the exchange or forex market, there would be no other mechanism to determine payments or currency exchange rates, which should make individuals and institutions that import and export goods and services.

During the last two decades, the foreign exchange market or forex was largely determined by the influence of banks, dominating an interbank trade, as these entities were the ones who played the main role in the foreign exchange market, channeling the demand and supply in that market.

However, before the liberalization of exchange rates and the global financial system, the forex market has expanded at an exponential rite. At first, as we stated banks were the main operators in the market, but slowly the currency market was expanded to include broader groups such as brokers and managers of pension, investment funds and financial firms different nature. Before the development experienced by the forex market, competition began to emerge, and several institutions began offering possibilities of operations and currency transactions to millions of individual investors.

Technological development by the emergence of internet benefited greatly expanding the forex market. Given the degree of competition they achieved several brokers started to offer very low cost to operate. This technological progress also achieved the same financial institutions reduce their costs, and this way the provision of various services are made possible at minimal cost for individual investors.

The possibility of operating in Internet allows real-time transactions, and access key information regarding the main events in the market. The forex market, however, continues to evolve and continue to develop by surprise.