The Foreign Exchange market emerged through gold exchange period.It was around 1973, the currencies of major industrialized nations were floated freely across nations, coinciding with currency prices. The creation of gold standard monetary system in 1975 is the most important events in the history of Forex market. Countries were commonly using gold and silver method of international payment before standard was created. Metals like gold and silver greatly affect global supply and demand. So due to this reason countries were commonly using gold and silver as method of international payment. The basic idea behind using gold standard was that government guaranteed the conversion of specific amount of gold and vice versa. In other word, a currency was backed by gold.
During the 1980's with the advent of computers and technology, market reaches for cross-border and Forex gained momentum extending through Asian, American, European time zone. Due to such improvement, the movement of cash flow across borders became continuum (i.e flow of cash across borders).Foreign exchange transaction gradually increased over the years. Today foreign exchange transaction reached to ordinary investors due to such technological advances. The big banks created dealing rooms where hundreds of millions of Dollars, Euros, Yen and Pounds were exchanged within a minutes. Today electronic brokers trade daily in Forex market. London became the world's leading international financial center. It was in London who developed the world's largest Forex market. More European and American Banks came to London to establish their regional headquarters. Although today market makers are allowed to break down larger inter banks and give small trades opportunity to buy or sell any number of these smaller units(lots).
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