Today’s exchange rates, though not always visible to the naked eye, are based on a long history of imports and exports between global economies.

Looking at these four impactful events in financial history can give you a clearer perspective of those currencies you trade today.

Moving Out of the Gold Standard

August 15, 1971, brought an end to a standard by which the entire global-monetary system was managed. The gold standard is intended to maintain market values and stable prices by globally using gold as our price standard.

For example, via a receipt that was much like a dollar bill, you would receive a $35 slip for every ounce of gold you gave up. Ending the gold standard, which president Nixon famously did, was among the top currency events ever.

For the first time, the USD’s value was based solely on trade, and the world used the dollar as a global monetary measure even in a money transfer.

Soros Bankrupting the Bank of England

George Soros is a billionaire philanthropist who gained much of his wealth by trading currencies against the bank of England’s financial positions. As an investor, he’s often known as “the man who broke the pound.”

Via a clever network of funds from his own finances, private institutions and individual investors, Soros garnered enough money to pull off a wild plan that would influence a country’s entire economy.

By foreseeing the likely failure of the pound within its ERM, Soros ended up sending the sterling into a downward-price spiral. He ended up making £1 billion from a single-selling position.

The Russian Ruble Crisis

Russia’s financial crisis of 1998, which is often referred to as the Russian Flu, led to the country defaulting on its debt.

Such debt crises stop banks from lending to you, but as a nation, your own central bank will be unable to redistribute money into your economy. At that time in ‘98, you’d get 21 rubles for just a single dollar.

The economic conditions of Russia’s crisis made Deutsche Bank the largest after it bought failed Russian firms.

2020’s Global Pandemic

In July of 2020, the price of the euro dollar sat at roughly $1.11 per share. During a climax in which the world became critical in judging the U.S.-COVID response, the economies of nations outside the U.S. simply managed to do better than the States.

The globe fell into economic peril due to coronavirus, but the USA’s response left it far behind in economic stimulus during its 2020 presidential election. The EUR/USD in April of 2020 traded at $1.06, which is ideal for the USD. Today, it trades at $1.18 in Europe’s favour.

Some of the major trends in the traditional currencies of today are still a result of events that occurred just years ago. Likewise, keep your timelines in mind as you seek to understand the reasons behind the current prices you find listed.