The Forex Marketing Today

There are many factors that the current structure of the Forex market have been conducted ..

Since the early 1970s the Forex market has grown in size, structure, and changed the way it operates. These transformation resulted from changes in the global financial systems. A primary cause of the increase in foreign exchange trading was the rapid development of the Euro-Dollar market, where US dollars are deposited into central and local banks outside of the United States. Similarly, it is typical for countries within the European markets to have their assets deposited outside the currency of origin.

To contrast this concept, during the start of the Cold War in the mid 1950s, all the money made by Russia from the sale of oil (which came in the form of US Dollars) was deposited in banks that were outside of the US for fear that the US Government would freeze the funds. This helped bring about a large amount of dollars that were not in the control of the US authorities.

The US government tired to impose laws restricting the loaning of dollars internationally. The Euro markets were particularly attractive because they had far fewer regulations and offered a much higher yield. Towards the end of the 1980’s, US companies began borrowing offshore and this is the norm today. Investors and savers find the Euro markets a lucrative and safe area to put their excess liquidity. In turn, these deposits provide short-term loans and finances import and export activities.

London was the principal offshore market, as it remains even now. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds. This allowed them to maintain their leading position in global finance. London’s convenient geographical location allows it to operate during Asian, Pacific and American market hours as well.

As Forex trading has grown, several international cities have emerged as market leaders. Currently, London, England has the greatest share of transactions with over 32% of the total trade volume. Other leading trading centers listed in order of volume are New York, Tokyo, Zurich, Frankfurt, Hong Kong, Paris, and Sydney.

Currently, the Forex market has expanded from consisting of only banks to one where many other kinds of institutions participate. The evolution of the Forex – from a range of loosely connected national financial centers to a single integrated international market – brought about a system that offers means of trading to not only financial professionals but also individuals who began trading and investing, and one that also plays an important role in our economies – both individual and national.

Since the late 1970s the Forex has seen an influx of financial entities, such as banks, hedge funds, and broker trading houses, as well as individual traders enter the Forex arena. Today, instead of being controlled by national banks and governments, the main factor that drives today’s Forex markets is supply and demand. The free-floating system is ideal for today’s Forex markets as international trade and commerce are abundant in the 21st century. The tremendous growth and application of technology in the Forex market broke down all barriers between nations, as well as time zone barriers eventually resulting in a 24 hour market throughout the American, European, and Asian time zones. Through the popularization of the internet, the trading of Forex online has enabled the average investor to reach this vital and practical market.