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Trends & Analysis
News

Week Ahead Preview: 10th of February

News

Amazon’s shares slide despite Q4 beat

News

PepsiCo’s shares climb despite Q4 sales miss

News

GBP/JPY price may drop to a Multi-month low

News

Alphabet’s shares plunge despite Q4 earnings beat

News

Gold Price Outlook – Will Gold hit a new all-time high?

Trends & Analysis
News

Week Ahead Preview: 10th of February

News

Amazon’s shares slide despite Q4 beat

News

PepsiCo’s shares climb despite Q4 sales miss

News

GBP/JPY price may drop to a Multi-month low

News

Alphabet’s shares plunge despite Q4 earnings beat

News

Gold Price Outlook – Will Gold hit a new all-time high?

Bretton Woods definition

The Bretton Woods Agreement was a monetary system designed to promote international economic stability and facilitate trade by fixing the exchange rates between major currencies and the US dollar, which was pegged to the price of gold.

The agreement was established in 1944 at the United Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire, in the United States. The aim was to create economic stability after World War II. It remained in effect until 1971, when the US suspended the convertibility of dollars into gold. This led to collapse of the fixed exchange rate system and a shift towards the current system of floating exchange rates.

 

How did the Bretton Woods Agreement work?

This agreement was undertaken by 44 UN member countries who agreed to tie their currencies to the US dollar. The countries included Canada, the United Kingdom, France. Under this system, the value of these currencies would remain within a narrow range of fluctuations against the US dollar by buying or selling foreign currencies in the foreign exchange market as needed. At the time, the US dollar itself was pegged to the price of gold at $35 per ounce.

The aim of Bretton Woods was to create a stable global financial system by preventing competitive currency devaluations. This would in turn promote international trade and investment.

 

Why did the Bretton Woods Agreement end?

The Bretton Woods Agreement ended when the US government could no longer maintain the exchange rate of the US dollar to the price of gold. In 1971, US President Richard Nixon announced that the US would no longer convert dollars into gold, effectively ending the system. Currencies then began to float freely against each other, with their values determined by various market forces.

 

Start trading with ADSS

ADSS offers a range of global markets for traders, with opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.

 

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