Characteristics of Freeoneer-Managed Account Programs
- Programs available in EUR and USD base currency
- Minimum investment of 5,000 USD
- No minimum investment period applies, but we suggest a period of at least 12 months
- You have online access to your account 24 hours a day, 7 days a week
- You may withdraw your profit or your initial investment at any time
- You place your funds in your own name with a clearing broker
- Neither Freeoneer or the fund manager handles your funds
Suite 13197, 2nd Floor
145-157 St John Street
Tel: +44 (0) 20 8144 8145
Fax: +44 (0) 20 3318 9030
History of FX
Throughout history, in times before money was invented, a barter system was used, the value of one good was expressed in terms of other goods. It was a common practice for people to trade goods and services for items of equal or similar value – items such as sugar, flour, clothing, labor, tools, teeth, leather, stones, shells and precious metals. The problem was that the barter system was imperfect and had many limitations; it was difficult to trade items with a fair and equal exchange for all parties involved, and that encouraged traders to use other mediums to determine the value of goods. Primary mediums were replaced by precious metals, in particular silver and gold, thus providing an accepted method of payment in exchange for goods. The introduction of the Roman gold coin followed by the silver one played a key role in the development of the trade and foreign exchange during the biblical times. Both coins gained wide acceptance in Middle East and other parts of the world forming an elementary international monetary system.
During the Middle Ages, paper money gained acceptance as bulky, heavy coins were quite impractical, especially for travellers abroad; their only real benefit was their durability. Throughout history, people began to realize the advantages of paper currency against the exchange of precious metals. Consequently stable governments eventually adopted paper currency and backed it’s value with gold reserves. This led to the introduction of the gold standard.
Before the First World War, most central banks supported their currencies with convertibility to gold. The US dollar adopted the gold standard in 1879 and became the standard-bearer replacing the British Pound when Britain and other European countries left the system with the outbreak of World War I in 1914. Eventually, though, the worsening international depression caused even the US dollar to abandon the gold standard by 1933, marking the period of collapse in international trade and financial flows prior to World War II.
The Bretton Woods System, 1944-73
Towards the end of World War II (July 1944) with the initiative of the U.S., 45 countries held a conference in Bretton Woods, New Hampshire. The purpose of the conference was to formulate a new international financial framework in order to prevent the reoccurrence of events such as the 1930s World Depression and ensure prosperity in the post war period. It resulted in a system of fixed exchange rates that reinstated the Gold Standard partly, fixing the USD at $35.00 per ounce of gold and the other main currencies to the dollar, which was initially intended to be on a permanent basis. The Bretton Woods system formalized the role of the US dollar as the new 'global' reserve currency with its value fixed to gold and the US assuming the responsibility of ensuring convertibility while other currencies were pegged to the dollar.
The establishment of the Bretton Woods Accord is usually thought to have marked the beginning of foreign exchange. It was meant to stabilize the global economy after World War II. It not only created the concept of pegging currencies against each other, but also created the International Monetary Fund (IMF) as well.
The Bretton Woods system came under increasing pressure as national economies moved in different directions during the 1960s. A number of realignments held the system alive for a long time, but eventually Bretton Woods collapsed in the early 1970s following President Nixon's suspension of gold convertibility in August 1971.
Smithsonian Agreement and the European Joint Float
In 1971 and 1972, two more further attempts at free-floating currencies against the U.S. dollar, namely the Smithsonian Agreement and the European Joint Float were, made. The first was just a modification of the Bretton-Woods Accord with allowances for greater fluctuation, while the European one aimed at reducing dependence of their currencies on the dollar. After the failure of each of these agreements, nations were allowed to peg their currencies to freely float, and were actually mandated to do so by 1978 by the IMF.
While commercial companies have had to face a much more volatile currency environment in recent years, investors and financial institutions have discovered a new playground. The FX market now dwarfs any other investment market.
The last few decades have seen foreign exchange trading develop into the world’s largest global market. Restrictions on capital flows have been removed in most countries, leaving the market forces free to adjust foreign exchange rates according to their perceived values. In the 1980s, cross-border capital movements accelerated with the advent of computers and technology, extending market continuum through Asian, European and American time zones.
From 1973 to 1996 the Foreign Exchange Market, although conceptually similar to the one found today, was considered a ‘closed’ market limited to major banks, financial institutions, multi-national organizations and other large corporations. These institutions conducted transactions in such large volumes it was impossible for any small individual to compete. With advances in technology over the years along with the industry's high leverage options, by 1996 on-line retail forex trading became available to individual Forex traders.