The history of currency change
THE EVOLUTION OF EXCHANGE MARKETS.

·· The gold exchange and the Bretton Woods agreement. Read
·· The explosion of the Euromarket. Read

The explosion of the Euromarket
An important catalizer for the acceleration of exchange operations was the rapid development of the Eurodollar market (U.S. dollars were deposited in banks outside of the United States). Some Euromarkets developed as a consequence of assets being deposited in a different currency to that of origin. The Eurodollar market was first created in the 50's, when Russia's income via petroleum sales -all in U.S. dollars- were deposited outside of the United States due to the fear of being frozen by U.S. regulatory authorities. The U.S. government imposed laws to restrict U.S. dollar loans to foreign investment. Euromarkets were thus particularly attractive because they offered much less regulations and greater efficiency. In addition, by the late 80's and on, U.S. companies started asking for loans outside of the U.S., and they found the Euromarkets to be a beneficial center where they could maintain excessive liquidness, provide short-term loans, and finance exportations and importations.

London was, and continues to be, the main offshore market. In the 80's it became the key financial center for the Eurodollar market when British banks, in order to maintain their leadership in world finances, started providing loans in U.S. dollars as an alternative to the British pound. The convenient geographic location of London (which operates at the same time as the Asian and American markets) was also decisive in order for it to preserve its dominant role in the Euromarket.