### Part 2: The History of FOREX

The FOREX exchange as it is known today began in 1973, but currency trading has
actually been occurring since the first coins were introduced in the times of the Pharaohs
of ancient Egypt. After World War II ended, though, the United States economy was strong
relative to most of the European countries. The U.S. dollar became the prominent currency
at this time and was recognized as the global reserve currency. All other foreign currencies
were measured against the U.S. dollar, which created a new financial network known as the
Bretton Woods System. This agreement allowed currencies to fluctuate within one percent
to the currencies’ par.

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![images.jpg](https://steemitimages.com/DQmcLoHipb5QkegLiyYMhYPqkEWjd58gCGFwW41Sfq2bm7k/images.jpg)

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The Bretton Woods System was in effect from 1944 until 1973, when the agreement to use
this market ended. 
The United Kingdom was faced with severe financial problems and began to
float its currency. 
This caused other currencies to drop in value and float their currencies as well.
U.S. President, Richard Nixon is credited with bringing about the free-floating currency system
that gave rise to the short-lived Smithsonian agreement in 1971. This agreement allowed currencies
to fluctuate within a range of two percent of the currencies’ par. These boundaries were
found to be too unrealistic and the agreement ended in March of 1973.
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1982 marked the first time a currency pair was offered as a purchase option to the United
States, with more currencies becoming available in 1983. By 1987, both the United Kingdom and
the United States were trading heavily on the FOREX, but there were many other countries such
as China, South Korea and even Iran (in 1991) participating as well.

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The first online trading of currency occurred in 1994, which in turn led to the development of
the Euro currency in Europe. The rise of the Euro threatened the dominance of the U.S. Dollar as the
global reserve currency. The Euro is currently the official currency in 19 European countries.