Currency Converter

What are the global currency markets? Currency describes the money or official means of payment in a country or region. The best-known currencies include the U.S. dollar, euro, Japanese yen, British pound and Swiss franc. Currency symbols exist for most currencies, such as $, €, ¥ or £. The foreign exchange (FX) markets, however, use ISO (International Organization for Standardization) codes to identify currencies. Every day, trillions of dollars in currencies change hands in a highly professional interbank market, in which electronic trading platforms link currency traders from banks across the world. FX markets are effectively open 24 hours a day thanks to global cooperation among currency traders. At the end of each business day in Asia, traders pass their open currency positions to their colleagues in Europe, who – at the end of their business day – pass their open positions to U.S. traders, who then pass positions back to Asia at the end of their business day. And the cycle begins anew. This makes FX truly global and liquid. Has currency trading always been as active as it is today? Trading in currencies has not always been as active, mainly because exchange rates were not flexible, or “free floating,” as most major currencies are today. In the nineteenth century, governments began to back their currencies with gold reserves so the value of a currency was fixed at a certain amount of gold. This gold parity provided stability in the value of the currency and gave people confidence in the currency. The U.K. introduced this “gold standard” in 1821, and by the beginning of the twentieth century, most major players in world trade had followed.