Forex History
The international currency market has a long history of formation. With the development of bilateral relations market foreign exchange transactions are also gradually modified. Finding the market today feature began in the 70-ies of the 20th century, when it was taken off the system of fixed exchange one currency against another. Upon the termination of the Bretton Woods system and the transition to a "floating rates" rates, a new kind of business that is based on a profit under conditions of constant changes in exchange rates.
The main stages of the global financial market
30s of XX century
The global financial crisis. There is a destruction of trade and economic ties. By the mid-30's London becomes the world's financial center. The British pound was then the main currency for trade transactions and the creation of reserves.
In 1930, the Swiss city of Basel was established Bank for International Settlements. The purpose of creation was the financial support of the newly independent states and nations, temporarily experiencing balance of payments deficit.
1944
In the U.S., was the Bretton Woods conference. It is considered the end of the US-British rivalry. At a conference attended by two major figures: John Maynard Keynes (England) and Harry Dexter White (USA). They are able to develop and adopt a new procedure for the development of the global financial system under the circumstances.
The main provisions of the Bretton Woods system
International Monetary Fund became the most important institution in control of the international financial and economic relations;
Declared the currency, playing the role of international reserves (the dollar and the de facto pound);
Adjustable parities of currencies pegged to the U.S. dollar (possibly deviation - 1%), the dollar pegged to gold (ounce of gold - $ 35);
IMF members have the right change parities only with the consent of the IMF;
Upon completion of the transition period all currencies should be convertible, to comply with this principle, all governments commit themselves to keep international reserves and, if necessary - to carry out intervention in currency markets.
IMF members make payment currency and gold.
1947
To pause the onset of communism in the U.S. are taking European recovery program. U.S. Secretary of State Marshall, in his report outlines the plan, under which Europe's economy is healthier to the point where she can independently maintain its military capabilities. One of the problems is the satisfaction of "dollar famine". If in 1949 the U.S. dollar liabilities Europe accounted for 3.1 billion, in 1959 they reached 10.1 billion dollars.
by 1958
Most European countries have announced the free convertibility of their currencies.
1964
Japan has announced the convertibility of its currency.
After the announcement of convertibility of the major currencies, it became clear that the U.S. is no longer able to maintain the price of $ 35 per ounce of gold. Dollar inflation was a threat to the United States. Kennedy administration adopted a series of wrong actions - a tax on the interest rate differential, which increases costs of foreign borrowers, and a program of voluntary restriction of foreign credits. Tax and limitations served as an impetus to the emergence of a new market - the market Eurodollars.
1967
Devaluation of the pound, which dealt the final blow to the illusory stability of the Bretton Woods system. In the 60s the U.S. current account deficit leads to a reduction in gold reserves from 18 to 11 billion dollars. Simultaneously, the growth of external debt is U.S..
1970
In the United States sharply reduced interest rates, which generates the strongest crisis dollar. For a short period of time a massive outflow of capital from the U.S. to Europe, where interest rates were higher.
May 1971
Germany and the Netherlands announced a temporary free floating currencies.
August 1971
Rising current account deficits the U.S. has forced President Richard Nixon suspended the convertibility of dollars into gold.
December 1971
At a meeting at the Smithsonian Institution in Washington was made last attempt to save the Bretton Woods system. Interval exchange rate deviations from purchasing power parities has been increased to 4.5%. Keep the boundaries of the interval it was very difficult. And some time later, the Bundesbank had intervened in the amount of $ 5 billion. It was an enormous sum in those days, but it has not brought success. Currency Exchanges in Europe and Japan had to temporarily close, and the U.S. announced the devaluation of the dollar by 10%. Developed countries have ceased to maintain fixed parities and embarked on a currency float.
1973-1974
United States phased out the tax on the interest rate differential and a program of voluntary restriction of foreign credits.
The Bretton Woods system ceased to exist. In recent years, the Bretton Woods system of currency traders benefit more speculative profit during periods that followed the cessation of intervention by central banks. After abandoning fixed exchange rates the possibility of extracting those profits are strongly limited. Many banks have incurred large losses, and two well-known "Bunkhouse Hershtadt" in Cologne and "Franklin National" in New York - even went bankrupt because of unsuccessful speculation.
1976
Jamaica held conference (Kingston). Representatives of the leading world states have formed a new principles of the World Monetary System. States had rejected the use of gold as a means of covering the deficit in international payments. The main elements of the new system are the inter-state organizations that regulate exchange relations, currency convertibility. Means of payment are the national currencies of the countries. The main mechanism through which the international currency transactions, are the commercial banks.
1978
Created the European Monetary System (EMS). The core of EMU is a grid of cross-currency exchange rates with central and boundary values of the exchange rate. In general, EMU reminds Bretton Woods. If the cross-rate close to the border, both sides should conduct interventsiyu.Klyuchevaya currency EMU - doychmarka.
1985
Gradually, the ECU is not countable, but the physical tools. Issued denominated in ECU traveler's checks and credit cards, banks offer deposits in the ECU.
1978-79
Education of the European monetary system. Agreement on its establishment was ratified by nine members - members of European Community. The aim of EMU - an attempt to protect the currency of the member states of sharp currency fluctuations. Of the 9 signatories, only 7 were full members: West Germany (FRG), France, the Netherlands, Belgium, Luxembourg, Denmark, Ireland. Britain did not participate in making all documents, Italy joined them on certain conditions. Simultaneously with the creation of the EMU introduced a new currency - the ECU. Goal - the creation of means of payment within the EMU, and in time - replacing national currencies. ECU was a basket of currencies of the countries participating in EMU. For the national currencies were set fluctuation limits with respect to their central values in the amount of 2.25% for the Italian lira - 6%.
1981
For the European Monetary System has joined Greece.
1986
In the European Monetary System enter Spain and Portugal. For the Spanish peseta were installed outside the fluctuations in the rate of 6%.
1990
The UK joined the exchange rate mechanism, which was developed within the framework of EMU, with the rate of sterling against the German mark 2.9500. West Germany (FRG) and East Germany (GDR) have teamed up in the unified Germany.
February 1992
In the Dutch city of Maastricht, 12 Member States of the European Monetary Union have signed a new Treaty on European Union. The basis of this contract agreement were Roman in 1957. In the Maastricht Treaty outlined guidelines of creating a single European market, European Central Bank, common currency, common economic policy.
September 1992
Hard times for the European currencies. There has been a famous falling pound. During the aggressive sales pound on the currency market the Bank of England and other members of the exchange rate mechanism of trying to keep it within the permissible range of oscillations by the marketplace. But all their efforts have not led to desired results. Then the Bank of England was forced to raise the discount rate three times in one day in the amount of 5% in an attempt to prevent the depreciation of the pound. But this measure is also not helped by continued pressure on the pound. The famous financier George Soros famously played the cheapening of the pound and got a huge profit when he saw that the pound will not be able to keep within the established framework of exchange-rate mechanism. Thus, the Bank of England was forced to withdraw its currency from the exchange rate mechanism. The fate of the British pound and Italian lira shared. It was announced that they are temporarily out of the exchange rate mechanism.
July 1993
The yield of the pound sterling exchange rate mechanism strongly influenced the movement of European currencies. All currencies have experienced the intense pressure that has led to significant movements in the direction of their cheaper. An interesting thing happened with the French franc. After the devaluation of the European currencies French franc was the last bastion of stability. And then the whole market went for him in the hope that it should understand the plight of other currencies. Remembering signed a bilateral cooperation agreement, Germany could not leave the franc to the wolves. Not only does the Bundesbank participated in interventions in the foreign exchange market, but also specifically to support the franc, reduction was accomplished German interest rates. But even such courageous measures could not save the franc against the strong price reduction. Because of these great events in the currency market in the exchange rate mechanism, it was decided to increase the range of possible variations of its constituent currencies with 2.25% and 6% to 15%.
December 1995
European leaders have agreed to introduce the Euro in 1999 for countries that meet certain parameters for the largest state budget deficit, public debt, inflation and interest rates.
December 1996
Determined by the appearance of the banknotes Euro.
June 1997
Determined by the appearance of the euro coins and euro-cents.
March 1998
The European Commission recommends a list of 11 countries that will enter the Euro: Germany, France, Italy, Belgium, Netherlands, Luxembourg, Ireland, Portugal, Spain, Austria and Finland.
May 1998
European Parliament approves the choice of 11 countries which will enter the European Monetary Union with the new currency Euro. To choosing a candidate for the presidency of the European Central Bank.
January 1999
In the market of a new European currency the Euro, which replaced the ECU. 11 European states have fixed exchange rates against the Euro. The European Central Bank began managing the monetary policy of the European Monetary Union (EMU).
The international currency market has a long history of formation. With the development of bilateral relations market foreign exchange transactions are also gradually modified. Finding the market today feature began in the 70-ies of the 20th century, when it was taken off the system of fixed exchange one currency against another. Upon the termination of the Bretton Woods system and the transition to a "floating rates" rates, a new kind of business that is based on a profit under conditions of constant changes in exchange rates.
The main stages of the global financial market
30s of XX century
The global financial crisis. There is a destruction of trade and economic ties. By the mid-30's London becomes the world's financial center. The British pound was then the main currency for trade transactions and the creation of reserves.
In 1930, the Swiss city of Basel was established Bank for International Settlements. The purpose of creation was the financial support of the newly independent states and nations, temporarily experiencing balance of payments deficit.
1944
In the U.S., was the Bretton Woods conference. It is considered the end of the US-British rivalry. At a conference attended by two major figures: John Maynard Keynes (England) and Harry Dexter White (USA). They are able to develop and adopt a new procedure for the development of the global financial system under the circumstances.
The main provisions of the Bretton Woods system
International Monetary Fund became the most important institution in control of the international financial and economic relations;
Declared the currency, playing the role of international reserves (the dollar and the de facto pound);
Adjustable parities of currencies pegged to the U.S. dollar (possibly deviation - 1%), the dollar pegged to gold (ounce of gold - $ 35);
IMF members have the right change parities only with the consent of the IMF;
Upon completion of the transition period all currencies should be convertible, to comply with this principle, all governments commit themselves to keep international reserves and, if necessary - to carry out intervention in currency markets.
IMF members make payment currency and gold.
1947
To pause the onset of communism in the U.S. are taking European recovery program. U.S. Secretary of State Marshall, in his report outlines the plan, under which Europe's economy is healthier to the point where she can independently maintain its military capabilities. One of the problems is the satisfaction of "dollar famine". If in 1949 the U.S. dollar liabilities Europe accounted for 3.1 billion, in 1959 they reached 10.1 billion dollars.
by 1958
Most European countries have announced the free convertibility of their currencies.
1964
Japan has announced the convertibility of its currency.
After the announcement of convertibility of the major currencies, it became clear that the U.S. is no longer able to maintain the price of $ 35 per ounce of gold. Dollar inflation was a threat to the United States. Kennedy administration adopted a series of wrong actions - a tax on the interest rate differential, which increases costs of foreign borrowers, and a program of voluntary restriction of foreign credits. Tax and limitations served as an impetus to the emergence of a new market - the market Eurodollars.
1967
Devaluation of the pound, which dealt the final blow to the illusory stability of the Bretton Woods system. In the 60s the U.S. current account deficit leads to a reduction in gold reserves from 18 to 11 billion dollars. Simultaneously, the growth of external debt is U.S..
1970
In the United States sharply reduced interest rates, which generates the strongest crisis dollar. For a short period of time a massive outflow of capital from the U.S. to Europe, where interest rates were higher.
May 1971
Germany and the Netherlands announced a temporary free floating currencies.
August 1971
Rising current account deficits the U.S. has forced President Richard Nixon suspended the convertibility of dollars into gold.
December 1971
At a meeting at the Smithsonian Institution in Washington was made last attempt to save the Bretton Woods system. Interval exchange rate deviations from purchasing power parities has been increased to 4.5%. Keep the boundaries of the interval it was very difficult. And some time later, the Bundesbank had intervened in the amount of $ 5 billion. It was an enormous sum in those days, but it has not brought success. Currency Exchanges in Europe and Japan had to temporarily close, and the U.S. announced the devaluation of the dollar by 10%. Developed countries have ceased to maintain fixed parities and embarked on a currency float.
1973-1974
United States phased out the tax on the interest rate differential and a program of voluntary restriction of foreign credits.
The Bretton Woods system ceased to exist. In recent years, the Bretton Woods system of currency traders benefit more speculative profit during periods that followed the cessation of intervention by central banks. After abandoning fixed exchange rates the possibility of extracting those profits are strongly limited. Many banks have incurred large losses, and two well-known "Bunkhouse Hershtadt" in Cologne and "Franklin National" in New York - even went bankrupt because of unsuccessful speculation.
1976
Jamaica held conference (Kingston). Representatives of the leading world states have formed a new principles of the World Monetary System. States had rejected the use of gold as a means of covering the deficit in international payments. The main elements of the new system are the inter-state organizations that regulate exchange relations, currency convertibility. Means of payment are the national currencies of the countries. The main mechanism through which the international currency transactions, are the commercial banks.
1978
Created the European Monetary System (EMS). The core of EMU is a grid of cross-currency exchange rates with central and boundary values of the exchange rate. In general, EMU reminds Bretton Woods. If the cross-rate close to the border, both sides should conduct interventsiyu.Klyuchevaya currency EMU - doychmarka.
1985
Gradually, the ECU is not countable, but the physical tools. Issued denominated in ECU traveler's checks and credit cards, banks offer deposits in the ECU.
1978-79
Education of the European monetary system. Agreement on its establishment was ratified by nine members - members of European Community. The aim of EMU - an attempt to protect the currency of the member states of sharp currency fluctuations. Of the 9 signatories, only 7 were full members: West Germany (FRG), France, the Netherlands, Belgium, Luxembourg, Denmark, Ireland. Britain did not participate in making all documents, Italy joined them on certain conditions. Simultaneously with the creation of the EMU introduced a new currency - the ECU. Goal - the creation of means of payment within the EMU, and in time - replacing national currencies. ECU was a basket of currencies of the countries participating in EMU. For the national currencies were set fluctuation limits with respect to their central values in the amount of 2.25% for the Italian lira - 6%.
1981
For the European Monetary System has joined Greece.
1986
In the European Monetary System enter Spain and Portugal. For the Spanish peseta were installed outside the fluctuations in the rate of 6%.
1990
The UK joined the exchange rate mechanism, which was developed within the framework of EMU, with the rate of sterling against the German mark 2.9500. West Germany (FRG) and East Germany (GDR) have teamed up in the unified Germany.
February 1992
In the Dutch city of Maastricht, 12 Member States of the European Monetary Union have signed a new Treaty on European Union. The basis of this contract agreement were Roman in 1957. In the Maastricht Treaty outlined guidelines of creating a single European market, European Central Bank, common currency, common economic policy.
September 1992
Hard times for the European currencies. There has been a famous falling pound. During the aggressive sales pound on the currency market the Bank of England and other members of the exchange rate mechanism of trying to keep it within the permissible range of oscillations by the marketplace. But all their efforts have not led to desired results. Then the Bank of England was forced to raise the discount rate three times in one day in the amount of 5% in an attempt to prevent the depreciation of the pound. But this measure is also not helped by continued pressure on the pound. The famous financier George Soros famously played the cheapening of the pound and got a huge profit when he saw that the pound will not be able to keep within the established framework of exchange-rate mechanism. Thus, the Bank of England was forced to withdraw its currency from the exchange rate mechanism. The fate of the British pound and Italian lira shared. It was announced that they are temporarily out of the exchange rate mechanism.
July 1993
The yield of the pound sterling exchange rate mechanism strongly influenced the movement of European currencies. All currencies have experienced the intense pressure that has led to significant movements in the direction of their cheaper. An interesting thing happened with the French franc. After the devaluation of the European currencies French franc was the last bastion of stability. And then the whole market went for him in the hope that it should understand the plight of other currencies. Remembering signed a bilateral cooperation agreement, Germany could not leave the franc to the wolves. Not only does the Bundesbank participated in interventions in the foreign exchange market, but also specifically to support the franc, reduction was accomplished German interest rates. But even such courageous measures could not save the franc against the strong price reduction. Because of these great events in the currency market in the exchange rate mechanism, it was decided to increase the range of possible variations of its constituent currencies with 2.25% and 6% to 15%.
December 1995
European leaders have agreed to introduce the Euro in 1999 for countries that meet certain parameters for the largest state budget deficit, public debt, inflation and interest rates.
December 1996
Determined by the appearance of the banknotes Euro.
June 1997
Determined by the appearance of the euro coins and euro-cents.
March 1998
The European Commission recommends a list of 11 countries that will enter the Euro: Germany, France, Italy, Belgium, Netherlands, Luxembourg, Ireland, Portugal, Spain, Austria and Finland.
May 1998
European Parliament approves the choice of 11 countries which will enter the European Monetary Union with the new currency Euro. To choosing a candidate for the presidency of the European Central Bank.
January 1999
In the market of a new European currency the Euro, which replaced the ECU. 11 European states have fixed exchange rates against the Euro. The European Central Bank began managing the monetary policy of the European Monetary Union (EMU).
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