Forex History Lesson

Forex trading began to look a bit different in 1999.At the time,eleven European countries comprising the European Economic and Monetary Fund (EMU) decided to together ditch their individual national currencies and to take up with the Euro. These eleven countries were Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain.Noticeably absent from the group were Britain, Sweden, and Poland. If the Euro’s strength endures, European countries side-stepping the unified currency will face added pressure to switch.

In 2002, then-president of the European Central Bank, Wim Duisenberg, had this to say about the new currency:”The Euro, probably more than any other currency, represents the mutual confidence at the heart of our community.It is the first currency that has not only served its link to gold, but also its link to the nation-state.”That statement must certainly have sent a few forex signals loud and clear to the traders at the time.But not everyone was convinced. Alan Greenspan, former chairman of the American Federal Reserve, was positioned among this group:”I was extremely skeptical whether a central bank with the same power as the celebrated German Bundesbank could impose itself on the whole continent.Besides, I had my doubts if such an institution was necessary, since Europe already had a de facto central bank, in the shape of the Bundesbank.”

Today, though the Euro is quivering against the US Dollar, which is itself experiencing some moments of duress, it is still the second most important international currency.Economic observers hold that having a unified currency shielded Europe from a worse fate after the financial upheavals that struck the world most pointedly in 2007 and 2008.Traders out of work and on the streets in their suits and ties are not the images anyone would like to see again in even the most cursory glance to the forex news.

The Euro is credited with having brought closer together the people living inside the Economic and Monetary Union (EMU) area-today a seventeen-country entity.But markets and industries, also, became more deeply involved with each other as a result of the single currency. How will you make the most of it?A good way to start might be to learn forex.

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