The market of foreign exchange operations exists since exists money.
It originates thousands of years B.C. when in Egypt there was first metallic currency. Foreign exchange operations in their present understanding started to develope in the Middle Ages. It was connected to development of international trade and navigation. The first speculators in foreign currency are considered to be the Italian moneychangers who earned on a currency exchange in different states.
With development of the interstate relations, the market of foreign exchange operations has changed, acquiring more and more accurate outlines. The most considerable changes were made to development of the currency market in the XX century. Finding of the modern lines by the market began in the seventies of the 20th century when the system of the fixed rates of one currency in relation to another was removed.
After lifting of restrictions on oscillations of currencies there was a new type of business which was based on receiving profit in conditions of the free system of change of exchange rates. And the change of course is now caused by various market conditions and regulated only by supply and demand.
Forex in Russia appeared in nineties of the XX centuries from the beginning of development of the free market relations. The most advanced banks quickly oriented and understood that in this market it is possible to get the considerable profit. The dealing departments which are engaged in speculative operations in the currency market were open. Experts of this profile quickly grew in price and found for application not only in Russian, but also in western banks. Every year the number of traders grows steadily.
The main stages of development of the Forex market (according to the Modern Encyclopedia)
30th of the XX century. World financial crisis. There is a corrupting of trade and economic relations. Times of domination of the gold-coin standard consigned to the past. To the middle of the 30th London becomes world financial center. The British pound sterling at that time was the main currency for trade operations and creation of currency reserves. Already then a pound was called a cable in a slang. This name is connected with the fact that the telegraph was a communication medium in case of the inference of transactions and information was transferred on a cable.
In 1930 in the Swiss city of Basel the Bank of International Payments was created. Financial support of the young independent states and states which temporarily have a deficiency of the balance of payments was the purpose of creation.
1944. In the USA was hold Bretton-Vudsky conference. It is considered the end of the American-British rivalry. There were two largest figures at the confeerence: John Maynard Kaines (England) and Harry Dexter White (USA). They manage to create and accept a new order of development of a world financial system at this conjuncture.
Basic provisions of Bretton-Vudsky system
The International Monetary Fund becomes the major institute controlling the international financial and economic relations;
Currencies play a role of international reserves (dollar and de facto pound sterling);
The adjustable parities of currencies bound to US dollar are set (the deviation - 1% is possible); the dollar is bound to gold (gold ounce - $35);
Members of the IMF have the right to change parities only with the consent of the IMF;
On completion of a transient period all currencies should become convertible; for observance of this principle all governments undertake to store the international reserves, and if necessary - to make interventions on currency wounds.
Members of the IMF make a contribution by currency and gold.
1947. For suspension of approach of communism, in the USA accept the program of recovery of the European economy. The U.S. Secretary of State Marshall in the report outlines the plan according to which the economy of Europe will get healthier to that level when it is able independently to support the military potential. One of tasks is the satisfying of "dollar hunger". If in 1949 dollar obligations of the USA to Europe made 3.1 billion, in 1959 they reached 10.1 billion dollars.
by 1958 the Majority of the European countries declare the free convertibility of the currencies.
1964. Japan declared convertibility of the currency.
After declaration of convertibility of the main currencies it became clear that the USA isnt able to support the price of $35 for gold ounce any more. Dollar inflation made threat for the USA. Kennedy's administration accepted a row of incorrect actions - the tax on the percentage differential raising expenses of foreign borrowers, and the program of voluntary restriction of the foreign credits is imposed. The tax and restrictions were an incitement to origin of the new market - the market of eurodollars.
1967. There was a devaluation of English pound that struck the last blow to illusory stability of Bretton-Vudsky system.
In the 60th years the deficit of the balance of payments of the USA leads to abbreviation of gold reserves with 18 to 11 billion dollars. Along with it there is a rise of external debts of the USA.
1970. In the USA interest rates that generates the strongest crisis of dollar sharply decrease. For a short period there is a mass outflow of the capital from the USA to Europe where the level of interest rates was higher.
May, 1971. Germany and Holland declare temporal free float of the currencies.
August, 1971. Growth of a deficit of the balance of payments of the USA forced the president R. Nixon to pause convertibility of dollars in gold.
December, 1971. At meeting at Smitsoniansky institute in Washington the last attempt to save Bretton-Vudsky system was made. The interval of deviations of exchange rates from parities was increased to 4.5%.
To retain boundaries of an interval it was very difficult. And a time later Bundesbank carried out intervention on the amount of 5 billion dollars. It was the enormous amount for those times, but it didn't bring success. The currency exchanges in Europe and in Japan had to be closed temporarily, and the USA declared devaluation of dollar of 10%.
The developed countries stopped supporting the fixed parities and were started up in currency float.
1973-1974. The USA gradually cancels a tax on percentage differential and the program of voluntary restriction of the foreign credits.
The Bretton-Vudsky system stopped the existence.
In recent years actions of Bretton-Vudsky system currency traders derived a big speculative profit during the periods following extinction of interventions of the central banks. After a failure from the fixed rates of possibility of extraction of such profit became strongly limited. Many banks suffered severe losses, and two known - "Bankhaus Hershtadt" in Colon and "Frenklin Neshnl" in New York - even went bankrupt because of unsuccessful speculative operations.
1976. The Jamaican conference (took place. Valve). Representatives of the leading world states created the new principles of formation of World currency system. The states refused use of gold as means of a covering of a deficit in case of the international payments.
Basic elements of new system the interstate organizations governing the currency relations, convertibility of currencies appear. Means of payment national currencies of the states appear. The principal mechanism by means of which the international currency transactions are carried out, commercial banks appear.
1978. The European Currency System (ECS) is created. The rod EVS is the grid of cross rates of currencies with the central and boundary values of exchange rates. In general, EVS are reminded by Bretton-Woods. If the cross rate comes nearer to boundary, both sides are obliged to carry out intervention.
Key currency of EVS - a deutschmark.
1985. Gradually the ECU becomes not the calculating, but a physical tool. The traveler's checks and credit cards denominated in ECU are issued, jars are opened by deposits in ECU.
January, 1999. In the market there was a new European currency of Euro which replaced with itself ECU. 11 European states recorded exchange rates in relation to Euro. The European central bank started controlling currency policy of the European currency Union (EMU).
In 1999 as the all-European currency euro was entered. Exchange rates of currencies of 11 European countries, participants of the agreement, concerning Euro (EUR) are given below.
The fixed rates of participating currencies of the European currency Union to Euro:
EUR/LUF 40.3399 Luxembourg franc
EUR/BEF 40.3399 Belgian franc
EUR/IEP 0.787564 Irish pound
EUR/FIM 5.94573 Finnish brand
EUR/PTE 200.482 Portuguese escudo
EUR/ESP 166.386 Peseta
EUR/ITL 1936.27 Italian lira
EUR/FRF 6.55957 French franc
EUR/DEM 1.95583 DM
EUR/NLG 2.20371 Dutch gulden
EUR/ATS 13.7603 Austrian shilling
Euro was released in the form of banknotes by a nominal of 5, 10, 20, 50, 100, 200 and 500 units and coins a nominal 1 and 2 euros and 50, 20,10, 5, 2 and 1 cent.
The end of the 1990th the Beginning of the active involvement of the private capital in the Forex market.