Tag Archive Free Floating Exchange System

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Forex History – 4

Forex History – 4

 

By the 90’s, thanks to the Free Floating Exchange System, the foreign exchange market moved as never before. While the tool was used to exchange currency and to get the right price, the internet started to be able to buy and sell at the beginning of the day.

In January 1999;

The Euro was first introduced to the market as the European Currency Unit (ECU).

11 The European Union country has decided to keep its national currency values ​​stable relative to the euro.

The European Central Bank (ECB) has become the institution that has experienced the foreign exchange policy for the European Union.

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Forex History – 3

Forex History – 3

Euro is working to get rid of the dollar

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.