The Forex can be dated back to around 1967 when a Chicago bank declined the request of a professor,
Milton Friedman, who wanted to purchase a large amount of British currency. Friedman knew that the
British pound was too high in correlation with the U.S. dollar, and wanted to purchase it while it
was strong, so that he could sell if for a profit when it began to fall. This request was declined
because it went against a Bretton Woods agreement which was a protection against improprieties
occuring with money crossing over borders. This agreement was put in place in order to standardize
world economies. Gold was used as the backbone for the international foreign exchange for a long
time, which was a solid commodity and always remained at a certain level. This market made
the international financial climate a stable and safe environment.
Unfortunately, the continued growth of international trade began to destabilize the Bretton Woods agreement, and
by 1971 it was canceled. From that moment forward, countries begain maintaining their own currencies. The
forex became a primary way for countries to keep a solid currency, by trading with nations, industries,
and individuals. The major gains in technology and finance throughout the 1980's and 1990's pushed the
foreign exchange forward. The computer advances of the 1980's pushed trading to over $60 billion a day.
The euro and dollar exchange of the late 1990's was a major push for the forex market by
bringing trade up to $1.5 trillion per day.
