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HISTORICAL EVENTS IN THE FX MARKET

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HISTORICAL EVENTS IN THE FX MARKET END OF BRETTON WOODS: FREE  MARKET CAPITALISM IS BORN (1971) ____________________________________________________________ On August 15, 1971, it became official: the Bretton Woods system, a system  used to fix the value of a currency to the value of gold, was abandoned  once and for all. While it had been exorcised before, only to subsequently  emerge in a new form, this final eradication of the Bretton Woods system  was truly its last stand: no longer would currencies be fixed in value to  gold, allowed to fluctuate only in a 1 percent range, but instead their fair  valuation could be determined by free market behavior such as trade flows  and foreign direct investment. While U.S. President Nixon was confident that the end of the Bretton  Woods system would bring about better times for the international econ omy, he was not a believer that the free market could dictate a currency’s  true valuation in a fair and catas

HISTORICAL EVENTS IN THE FX MARKET

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HISTORICAL EVENTS IN THE FX MARKET Before diving into the inner workings of currency trading, it is impor tant for every trader to understand a few of the key milestones in the  foreign exchange market, since even to this day they still represent  events that are referenced repeatedly by professional forex traders. BRETTON WOODS: ANOINTING  THE DOLLAR AS THE WORLD  CURRENCY (1944) _____________________________________________________________ In July 1944, representatives of 44 nations met in Bretton Woods, New  Hampshire, to create a new institutional arrangement for governing the in ternational economy in the years after World War II. After the war, most  agreed that international economic instability was one of the principal  causes of the war, and that such instability needed to be prevented in  the future. The agreement, which was developed by renowned economists  John Maynard Keynes and Harry Dexter White, was initially proposed to  Great Britain as a part