Currency trading has a long history and can be traced back to theancient Middle East and Middle Ages when foreign exchange startedto take shape after the international merchant bankers devised billsof exchange, which were transferable third-party payments thatallowed flexibility and growth in foreign exchange dealings.The modern foreign exchange market characterized by theconsequent periods of increased volatility and relative stability formeditself in the twentieth century. By the mid-1930s London became tobe the leading center for foreign exchange and the British poundserved as the currency to trade and to keep as areserve currency.Because in the old times foreign exchange was traded on the telexmachines, or cable, the pound has generally the nickname “cable”. In1930, the Bank for International Settlements was established inBasel, Switzerland, to oversee the financial efforts of the newlyindependent countries, emerged afterthe World War I, and to provide monetary relief to countriesexperiencing temporary balance of payments difficulties.After the World War II, where the British economy was destroyedand the United States was the only country unscarred by war, U.S.dollar became the prominent currency of the entire globe. Nowadays,currencies all over the world are generally quoted against the U.S.dollar.
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