A Brief History of the Foreign Exchange Market

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A Brief History of the Foreign Exchange Market

Prior to 1971 the rate at which one countries money was exchanged for another countries money (exchange rate) was fixed (remained the same).
1968 $1.00 = 4.37 Swiss Francs
1969 $1.00 = 4.37 Swiss Francs
1970 $1.00 = 4.37 Swiss Francs
Since 1971 exchange rates have been floating (rate at which one countries monies are exchanged for another countries monies constantly fluctuates, based upon demand and supply).
1971 $1.00 = 4.1 Swiss Francs
1972 $1.00 = 3.8 Swiss Francs
1973 $1.00 = 3.1 Swiss Francs

A quick recap of the U.S. Dollar since it began floating.
· 1971-1979 relentless decline.
· 1980-1985 strong dollar
· 1986-1995 persistent decline.
· 1996-2001 strong dollar
· 2000-2003 declining dollar

Long-term persistent trends are one of many reasons foreign exchange trading and investing is very profitable and low risk. All of the reasons will be explained later in this document. Here are some website suggestions for additional reading:

pacific.commerce.ubc.ca/xr. average annual exchange rates since 1948
fxstreet.com click bottom left Education, then click Forex Intro