By Cedric Welsch
The foreign exchange market may be called a phenomenon because it is something that has occurred without human planning or deliberation. It is a very interesting example of something that has happened as a result of the colliding of things in the technological sphere. Events have transpired so rapidly tat the word ‘forex’ is not yet in many dictionaries.
In the 1970 the economic boom in China was as yet unheard of and the American dollar ruled the financial world. The Bretton Woods system allowed countries outside the USA to set the value of currencies relative to the dollar. This had the unwelcome effect of keeping the dollar strong so America unilaterally allowed it dollar to float with recourse to the decisions of other countries. This gave birth to the forex phenomenon as it is known in the twenty-first century.
Globalization has the foreign exchange at its centre. The mission of foreign exchange trade is to facilitate global transactions by allowing a country to buy and sell goods in the currency of another country and repatriate the proceeds.
Communication and transportation technology has also facilitated the new volumes of trade which rely on the world wide web for communication that is absolutely essential for the volumes that are recorded. The market does not reside anywhere in particular. It has no one building or stall, but is located in banks and financial houses across the globe. It may be partially true to say that its location is in World Wide Web.
The market could not function as it does without the Internet. This facilitates rapid communication and allows for the massive volumes that are transacted. The fact that the Internet only materialized in the final decades of the twentieth century illustrates how recent the phenomenon is and how massive institutional organizations and ordinary individuals have access at different levels to the same market.
In the real estate situation a buyer or seller may wait for six months for a suitable transaction to be completed. This is not the case in foreign exchange where buyers and sellers can find willing trading partners instantly. Such liquidity has probably never before been equalled.
Like a growing orgasm the already huge foreign exchange market continues to expand. It is estimated that the daily turnover is in excess of three trillion dollars and still growing as new participants flood in through the Internet. It may not be an exaggeration to say that it has already become a permanent feature of the financial world that exceeds anything that has occurred before in human history.
About the Author
The uprising of forex techniques will always make things a little extra competitive to all.
Whereas, you as a wise trader, must always look at the fundamental fx trading strategies.
