It is well known that all nations around the world or groups of nations have their own currencies which can be converted from one to another.
When our ancestors first began trading with each other they would swap with one another what ever the good or product they had produced in exchange for what the other needed, this rapidly moved to a bartering system where they would agree relative values of the goods that they were exchanging. As this barter system became more complicated ancient civilizations introduced various forms of currency that could be used instead of bartering. In time the currency that became used would be based on precious metals such as gold or silver. As international trade developed traders would exchange holdings of particular precious metals in payment for goods being sold. However, as physically handing over large quantities of gold would be increasingly hazardous due to the potential for theft and piracy, another system was introduced. Knowing that a precise weight of gold represented a precise quantity of their currency enabled trade between different nations to take place without the actual need to hand over bullion with every transaction and in time promissory notes were introduced which were backed by gold reserves. With the increasing sophistication and prevalence of international trade nations would agree to account to each other for the movements in their relative holdings of gold. Until the early to mid twentieth century many nations adhered to a gold standard whereby they actually owned the amount of gold that equated to the amount of currency in issue.
The promissory notes that were issued and exchanged became used by traders for additional transactions and knowing that they would be ultimately honoured became acceptable as an international currency. The individual traders of different nations would be able to know how much a promissory note from one country was worth in their local currency. This created the opportunity for currency conversion and markets were established where it was possible to buy one currency with another. The sophistication of these exchange rates would be capable of varying depending how reliable one nation was compared to others to meet their settlement obligations. This led to the beginnings of the international foreign exchange markets that developed around the world.
The growth in the global economy particularly during the twentieth century together with the increasingly complex banking transactions led to the abandonment of the gold standard concept as there would be insufficient gold reserves to match the amount of currency that needed to be issued to support the volumes of trade. In the present day the foreign exchange markets facilitating currency conversion are open 24 hours a day and the relative rates of exchange between each currency may vary minute by minute as the attitudes towards the various world currencies change depending upon a myriad of economical and political factors. There is always a differential in the amount that a currency will be converted at depending whether you are a buyer or seller, which enables the foreign exchange traders to make their profit on the transactions.
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Currency Change is a foreign exchange broker for private individuals and businesses to exchange money: 0% commission on foreign exchange rates, saving you up to 5% of your capital on currency transactions compared to your local bank.You can visit currencychange.eu for a free quote and personal advice.