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In 1967, the bank of Chicago professor named Milton Friedman a loan of £ (Pound Sterling) refused because he planned to used the loan to sell and buy back the dollar, then we have to admit that the pound is high against the dollar price. He wanted to sell this money, then bought it when pound fell to a low price and return them to the bank. Of course, by the way he was quick profits. rejection of the bank caused the Bretton Woods agreement is 20 years later to set. Bretton Woods agreement to take U.S. dollars (USD) as a standard, and the exchange rate between the dollar and gold was $ 35 / 1 oz.


Agreement Bretton Woods Agreement was founded in 1944 committed to a stable monetary policy to avoid the free cash to another country to build. Avoid currency speculation in the world, as the gold exchange standard - prevailing from 1876 until World War I, the control system in the world economy. By using the gold exchange, currencies in a new era for the company because the shields of gold prices. In ancient times by kings and dictators of totalitarian transactions using gold as the main and lower the value of money causes inflation.

However, the standard used for exchange and not a lack of "broken." As the economy strengthens, imports of goods from abroad increased rapidly. But if the economy weakens, the national gold reserves needed money to buy foreign release performed, the result is a depreciation of the currency, interest rates fell and the economy began to slow down operations and cause a recession. Final goods rose more than the normal level, and of course the attraction of selling goods to other countries increased. This has caused huge buying power and an increase in the price of gold rose high at the moment, interest rates fell to its lowest point for creating wealth for the economy. The use of gold as a standard transaction that applies until the end of World War end the flow of transactions and gold are now free to move.

After the war the Bretton Woods agreement was established. Countries participating in the agreement agree to their own currency to maintain security by an amount equal to the dollar and the appropriate level of gold as needed. The lower the price of copper has been banned in their own language in transactions with foreign countries to facilitate, and are only allowed for the price of less than 10% lower. In 50 years of the 19th century, when the currency of international transactions was extended to the capital services for post-war reconstruction and rehabilitation was transferred en masse. This has led to foreign currency exchange rates destabilize established in the Bretton Woods agreement.

The Bretton Woods pact finally abolished in 1971, and currently the U.S. dollar (USD) can be used instead of gold (gold). In 1973, the currency advanced countries were freely floating, controlled resources at this level depends on the strength of the demand-supply (supply and demand) from the economy, they are a dynamic force in the foreign exchange impact. The price of the pair is recommended every day, with a large number of transactions, speed and price unchanged for 70 years from the 20th century, the application of new markets for financial instruments, which led to the earlier rule was abolished and the period of gradual liberalization of world trade.

In the '80s, the amplitude of movement of capital thanks to the explosive growth of the computer industry and technology, the market continues to grow in Asia, Europe and America ... The number of cash transactions in the foreign exchange market increased dramatically from 70 billion dollars per day to 1.5 trillion U.S. dollars a day two decades later.