8 Surprising Facts in Forex History

Forex History

Although many people think that Forex consists of advanced analysis, heavy stress and risk, the Forex market has a very interesting history. We can say that foreign exchange trade, which has deep historical roots from ancient times to the present, has taken place in our lives in every period. To take a brief look at the interesting history of Forex:

1- The history of Forex dates back to ancient times

Currency trading is not an emerging idea today. People who trade foreign exchange have always existed since ancient times. In the old inscriptions, it is mentioned that the people who are referred to as “People who make money changers” in today’s sense, made this trade in many places in the cities, in the market places or on special days.

2- The World’s First Bank Monte Dei Paschi di Siena

The world’s first recognized bank today is Monte Dei Paschi di Siena, which was established in Tuscany, Italy in 1472 and still continues its activities today.

In the 15th century, the Medici family opened banks in different places to facilitate payment transactions in their trade. In order to facilitate trade in banks, they prepared account books called “nostro”. These account ledgers not only facilitated the keeping of accounts in other banks, but also enabled the display of the amount in the account in different currencies.

3- The Roots of Modern Forex

The US company Alexander Brown & Sons started trading in different currencies in 1850. In the 1880s in the USA, different companies started to get permission for forex transactions.

4- Active Trading Centers of the 20th Century

Although the pound was an active currency in foreign exchange trading, Britain itself did not dominate Forex trading in the early 20th century. The most active trading centers were seen as Paris, New York and Berlin. London was relatively quiet in terms of forex trading until 1914.

5- The Beginning of Modern Forex History

The year 1973 is seen as the year that the modern Forex market basically started. The end of the fluctuations in the market and the removal of the restrictions on foreign exchange contributed greatly to the development of Forex.

6- Tools that Enhance Modern Forex History

In June 1973, Reuters introduced new trading computers to replace the telephone and telex methods used in the past. Developed by Reuters before the development of the internet in the mid-1980s and known as Reuters Dealing, these devices were the most important tools of Forex trading at that time. Systems that look like antiques today were seen as important trade tools of the period.

7- Increase in Liquidity in Forex

In the mid-1990s, the Forex market was held by banks or companies with a minimum liquidity of $40-50 million. With the development of the Internet and the development of online platforms, it is seen that the market has reached wider audiences.

8- Forex Becomes the Most Liquid Market in the World

The most traded currencies in forex, which is seen as the most liquid market in the world today, are:

1) US Dollar (USD): 87%,

2) Euro (EUR): 33.4%,

3) Japanese Yen (JPY): 23%,

4) British Pound (GBP): 11.8%

5) Australian Dollar (AUD): 8.6 %,

6) Swiss Franc (CHF): 5.2%,

7) Canadian Dollar (CAD): 4.6%,

8) Mexican Peso (MXN) 2.5%,

9) Chinese Renminbi (CNY): 2.2%,

10) New Zealand Dollar (NZD) 1.4%.

SEE ALSO; What is Regulation? The Importance of Regulations in Forex

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