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Events that Shaped the Foreign Exchange Sydney

Foreign Exchange Sydney Plaza Accord

There are a number of events that have shaped the foreign exchange Sydney.  It is important that you know what these events are.  When you know about the events you will be able to better understand the foreign exchange Sydney and how you can trade on it.

The Bretton Woods Accord

The first major event which shaped foreign exchange was the Bretton Woods Accord.  This accord came about at the end of WW2.  Bretton Woods, NH was the chosen location for the United States, France and Britain to meet with the United Nations.  At this meeting these powers were to design a new economic order for the world.  America was chosen as the location because it was relatively unscathed by the war.  Additionally, the war had raised the value of the US dollar from the poor currency it was to the world benchmark.  The accord would create an economic environment which was stable and in which the world’s currencies could recover from the effects of war.  This accord also looked at the creation of the International Monetary Fund and the pegging of different currencies to stabilise the global economy.  The Accord stayed in effect until 1971 but during these years it failed to meet the charter it was set which was to re-establish stability in the Japanese and European economic market.

Introduction of Floating Rates

In 1971 the Bretton Woods Accord was ended and the Smithsonian Agreement came about.  This Agreement was similar to its predecessor but allowed currencies to fluctuate more.  However, in 1972 European powers wanted to remove the economic dependency on the US dollar that they had faced.  To do this Belgium, France, West Germany, the Netherlands, Luxemburg and Italy created the European Joint Float.  Unfortunately the mistakes of the Bretton Woods Accord still plagued the agreements and they collapsed a year later.  It was through the acknowledgement of these failures that the free floating system came about.

The Plaza Accord

With the collapse of the Bretton Woods Accord and the foundation of the free floating system traders began to realise that where there are fluctuations there is a profit to be had.  This surge of profit makers caused the US dollar to rise in value quickly and too much.  The US dollar value began to crush the currency of third-world countries leading to debt and the closing of many American factories.  The Plaza Accord was created by the G-5 at the Plaza Hotel in New York.  The accord called for the appreciation of currencies other than the US dollar which actually lead to a fall in the value of the US dollar.

The Creation of the Euro

After World War 2 the countries of Europe created treaties which were meant to bring them closer together.  The 1992 treaty, known as the Maastricht Treaty was the most prolific as it created the European Union and the single currency of the Euro.  This treaty has had several amendments but the base still gives European banks great benefits in the global economy.

The Foreign Exchange Sydney

The invention of the internet and its infiltration into the home lead to a change in the way people used and viewed money.  The internet allows someone at home to find out the exact price of currency at any time which previously required brokers.  Foreign exchange trading platforms have also created a trading market where anyone can trade.

 

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