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What Exactly is Forex?
English, "Foreign Trade" Forex is the abbreviation of the word, of a nation's currency, the currency of another nation is an environment that allows for the exchange. Foreign exchange market is the world's largest financial market, did you know that before? He is so big that change hands daily lives of more than 19 trillion and 3 of them from U.S. Treasury Department is even greater. Unlike other financial markets such as forex, a currency exchange bureau is not a specific place. Forex, a worldwide trade by converting to another currency, a bank, is a network of companies and individuals. The lack of a physical exchange forex major financial centers located throughout the 24 hours from one region to other regions to ensure the process by actively switching.
Traditionally, only individual investors access to foreign exchange trading, and investing large amounts of money were used for the bank. Especially in 1971, after allowing free movement of exchange rates, trade volumes over time has expanded greatly. Today, importers and exporters, international portfolio managers, multinational corporations, a stockbroker, daily processing, long-term holders and high-risk mutual funds and all goods and services to pay, the financial assets in the operation or fluctuations in other markets affected by limiting currency fluctuations reduce the risk for Forex uses.
Forex History
Under the Currency and the Bretton Woods Agreement
In 1967, Milton Friedman, a Chicago bank, a college professor by the name of the British pound currency and credit was refused. The reason that Friedman's rejection of this money will be used for foreign exchange trading is between. Pound'ın will gain value against the dollar so much that Freidman understand, sell pounds and buy dollars in value after the nearest pound and expect to return the money back pound'a against. So as to obtain a quick profit to the bank as well as off debts. That's why the banks refused to loan the Bretton Woods agreement was signed twenty years ago is due. The value of these agreements with 35 dollars an ounce as a fixed rate of national currency is fixed against the dollar.
Bretton Woods agreement in 1944 which entered into force for the purpose of money between nations as obstacles to escape the financial balance between the nation and the world was to limit speculation on exchange rates. Before this agreement under the international economic system, constituted currency. The value of the currency under the gold exchange is supported by entering a new phase was stable. Formerly enjoyed by the king and administrators by reducing the value of money due to inflation the old fashioned way they ended the Bretton Woods agreement.
Fixed under the Bretton Woods agreement that established the view at the front, there were some errors. As economies become more powerful there would be money to support the gold reserves will have to import heavily from abroad. As a result the money supply will decline, interest rates will rise and economic activity will slow considerably. Commodity prices finally hit bottom when the other nations that will show great interest. This increased interest in the market until the supply of money will be injected to the bottom, will reduce interest rates and the market will bring back prosperity. Under a fixed exchange rate, this type of incident that occurred at times I. Continued until the outbreak of World War II. I. World War, trade flows and to prevent the free movement of gold.
