The Smithsonian Agreement, which allowed for a fluctuating band for currencies, was signed in 1971.
The aim was to make Europe more independent of the dollar. The agreement in particular allowed the exchange rate to fluctuate more broadly than the Bretton Woods system. Foreign exchange prices were allowed to fluctuate up to 4.5%, up and down in agreed parities.
Developed countries are abandoned from the fixed exchange rate system linked to the dollar and switched to the free exchange rate regime where the exchange rates are determined by the market. As a result, the, which constitutes today’s Forex market, emerged.