The modern international monetary system emerged with the creation of the Gold standard in 1875, in which each unit of a national currency was guaranteed to be worth a specific amount of gold. This system worked well until the paper currency supply exceeded available gold reserves.  In 1944, the Bretton Woods system was adopted, switching the Gold standard for the U.S. dollar. The dollar remained the only currency backed by gold.


U.S. gold reserves were depleted over a 25 year period, and by 1971, were no longer sufficient to back the U.S. dollars that were in circulation, and governments switched to a primarily decentralized forex marketplace model. The value of each base currency is now determined by its relationship to a second currency, called a counter-currency.  The quotation of how much one unit of the base currency can be exchanged for in the counter-currency is that currency pair’s exchange rate. For example, if 1 Euro (EUR) can be exchanged for 1.37 U.S. dollars (USD), then the EUR/USD exchange rate is 1.37.



At first, access to participate in the foreign exchange market was limited to the largest commercial and national central banks.  However, this changed in the late 1990s, with the spread of high speed internet access, along with the development of retail forex trading brokerages who pooled the funds of many different individual clients in order to gain entry to the top tier trading markets. Forex traders can now work with any of several different forex brokerages who offer specialized platforms allow clients to place trades from their own personal computers.


To receive access to the best rates, smaller brokerages typically team up with a liquidity provider who has established a relationship with a prime broker. Leverate works with more than a dozen liquidity providers to ensure that we can offer our brokers the best prices in all of our instruments.