Trading in foreign exchange (FOREX) dates back to the late 19th century with a lengthy history. Because of the fluctuating nature of currencies around the globe, a scheme was essential to ensure a fair and easy to calculate purchasing or selling one currency for another.
In return for a particular quantity of their currency that was used to buy products from other nations, foreign nations were guaranteed a certain quantity of gold through a standardized scheme.
This simplified trading and imports from overseas countries since every nation was able to translate the price of something into its own currency. This not only alleviates the tensions when dealing with foreign nations, but also simplifies them considerably and facilitates the growth of their own economy.
infographic by: www.myforexchart.com