It is to express the value of goods and services by other commodities. This system is called barter or swap. Carry goods for exchange was exhausted, so I started using some of the economies of certain goods, such as feathers, stones polished, distinctive metals such as gold and silver as a means of exchange. The first coins were made of gold and silver. During the Middle Ages, economies started using the stock exchange value of a promise to pay the debt or receivables. However, the forex industry itself is the latest among the financial markets.
During the last century, the foreign exchange market has seen some dramatic changes. In 1944, he was the founding of the foreign exchange system after World War II as a result of holding a multi-national conference held in Bretton Woods , New Hampshire
Before World War I, the central banks supported their currencies through conversion into gold. You can convert paper money into gold on demand to the bank. Because it was unlikely that all paper money will ask holders of gold at the same time, banks were only need to maintain a specific amount on hand to handle a normal exchange of requests (gold reserves). Therefore, the amount of money suspense was over relatively to the amount of actual gold in hand. During times of crisis, when confidence in the financial system is low, there was a large amount of currency holders asking for conversion into gold at the same time, especially if more than gold in Hozh bank. Political instability and inflation result is to increase the supply of paper money (IOUs), relative to gold reserves. Foreign currencies have been affected by such events due to their impact on the economy.
After that, foreign exchange controls introduced to control the supply and demand forces. In July 1944, at the end of World War II, it picks allied countries (the United States , Britain , and France ) in the financial conference and criticism of the United Nations, which was held in Bretton Woods , New Hampshire