The forex market has a rich and centuries-old history. Forex market is known to be one of the oldest marketplaces in the world. It has witnessed an incredible journey since the 1800s. Many historical and significant events had taken place in the forex market. All these events have had a substantial impact on the forex market. Many events influenced the forex market and have changed its face.
Forex markets were launched in the 1700s
The forex market was launched in the 1700s. It was in India and China. Different currencies such as guarri, Korean won, Indian rupee, and Chinese yuan are still being used in these countries. Before the 1700s, only gold and silver were used for exchange purposes worldwide, Forex market hours in GMT times.
Global adoption of Forex began in the 1800s
Once the forex market became popular in the Indian subcontinent, it was considered one of the most stable and reliable currencies. Thus, it soon became the international money market. Other countries, such as Britain and the United States, adopted it. Nowadays, the best south african forex brokers are on peak.
The volume of forex trading was very high during the last century
The forex market continued to multiply throughout the 20th century. The first electronic trading system, known as the Thomson Reuters system, was launched in 1990. The trading volume rose from USD 5 billion in 1987 to USD 100 billion in 2005.
Today, the volume of trading in the forex market is approximately USD 5,900 billion. The daily turnover is USD 521 billion, and the average daily trading volume is USD 54 billion. The forex market had grown from USD 500 million to almost USD 5,900 billion in the last century. The active trading of Forex is associated with the growth in the size of the global economy.
Markets in the 1980s and 1990s
The 1980s was when the forex market saw a significant change in the market structure. Traders traded in the single currency area, known as the EURO. The US dollar and Japanese yen dominated the market. The combined trade volume of the US dollar and the Japanese yen was more than 90% of the global trade volume. The trading volume of the Russian ruble and the British pound was less than 5%.
After the end of the Cold War, the power of the US dollar grew over the trading market. The global GDP grew from USD 60 trillion to USD 120 trillion. Thus, the trading volume of the US dollar increased from USD 120 billion to USD 900 billion. At present, the trading volume of the US dollar is almost $4,600 billion, while that of the Japanese yen is $376 billion.
The phase of the US dollar
However, the trading volume of the US dollar increased at a languid pace during the first decade of the 21st century. The events in the Middle East triggered this growth. The trade volume of the US dollar increased at a rate of $30 billion per year from 2005 to 2008. A decline followed this period in the trading volume of the US dollar.
The decline in the US dollar trading volume was due to the sharp drop in the price of crude oil. This decline had a profound impact on the world economy. The US dollar continued to decline even after the global economic recovery. During this period, the trading volume of the US dollar was about $55 billion. This period is called the phase of the US dollar.