History[edit]

Ancient[edit]
Currency trading and exchange first occurred in ancient times. Money-changing people, people helping others to change money and also taking a commission or charging a fee were living in the times of the Talmudic writings (Biblical times). These people (sometimes called "kollybists") used city-stalls, at feast [7] times the temples Court of the Gentilesinstead. Money-changers were also in more recent ancient times [8] silver-smiths and, or, gold-smiths. During the fourth century the Byzantium government kept a monopoly on the exchange of currency.
[9] [6]

Currency and exchange was also a crucial element of trade in the ancient world so that people could buy [10] and sell items like food, pottery and raw materials. If a Greek coin held more gold than an Egyptian coin due to its size or content, then a merchant could trade fewer Greek gold coins for more Egyptian ones, or for more material goods. This is why the vast majority of world currencies are derivatives of a universally recognized standard like silver and gold.

Medieval and later[edit]

During the fifteenth century the Medici family were required to open banks at foreign locations in order to [11][12] exchange currencies to act for textile merchants. To facilitate trade the bank created the nostro (from Italian translated "ours") account book which contained two columned entries showing amounts of foreign and local currencies, information pertaining to the keeping of an account with a foreign [13][14][15][16] th th [17] bank. During the 17 (or 18 ) century Amsterdam maintained an active forex market. During 1704 foreign exchange took place between agents acting in the interests of the nations of England and [18] Holland.

Early modern[edit]
The firm Alexander Brown & Sons traded foreign currencies exchange sometime about 1850 and were a [19] leading participant in this within U.S.A. During 1880 J.M. do Esprito Santo de Silva (Banco Esprito e Comercial de Lisboa) applied for and was given permission to begin to engage in a foreign exchange [20][21] trading business. 1880 is considered by one source to be the beginning of modern foreign exchange, significant for the fact [22] of the beginning of the gold standard during the year. Prior to the first world war there was a much more limited control of international trade. Motivated by the [23] outset of war countries abandoned the gold standard monetary system.

Modern to post-modern[edit]
From 1899 to 1913, holdings of countries' foreign exchange increased at an annual rate of 10.8%, while [24] holdings of gold increased at an annual rate of 6.3% between 1903 and 1913. At the time of the closing of the year 1913, nearly half of the world's foreign exchange was conducted [25] using the Pound sterling. The number of foreign banks operating within the boundaries of London increased in the years from 1860 to 1913 from 3 to 71. In 1902 there were altogether two London foreign [26] exchange brokers. In the earliest years of the twentieth century trade was most active in Paris, New York and Berlin, while Britain remained largely uninvolved in trade until 1914. Between 1919 and 1922 the employment of a foreign exchange brokers within London increased to 17, in 1924 there were 40 [27] firms operating for the purposes of exchange. During the 1920s the occurrence of trade in London resembled more the modern manifestation, by 1928 forex trade was integral to the financial functioning of the city. Continental exchange controls, plus other factors, in Europe and Latin America, hampered any [28] attempt at wholesale prosperity from trade for those of 1930's London. During the 1920s foreign exchange the Kleinwort family were known to be the leaders of the market, [29] Japhets, S,Montagu & Co. and Seligmans as significant participants still warrant recognition. In the [30] year 1945 the nation of Ethiopias' government possessed a foreign exchange surplus.