A look back at some of the most unusual events in the market


Believe it or not, historic events have shaped and had an impact in the global economy with the currency market, having the biggest impact of all. A currency's value is a basic fundamental component of a country's wealth that allows the purchase of goods, especially nowadays.
Today we go through the Top10 historical events that changed the global economy up until now. Let's unfold!

1. Nixon Shock

Up until 1971, the Bretton Woods system was created to stabilise economies

during and after the period of the two world wars. This agreement was

terminated in 1971 by President Nixon leading the US dollar to become a

free-floating currency. This was called "The Nixon shock" managed to change the

currency market forever. With the dollar and pound now floating free, and other

currencies to follow, the price of all the major currencies changed instantly.

2. Middle East Oil crisis

In 1973, Middle Eastern states placed an embargo on oil trade which disabled

the oil trading leading economies into crisis. This has almost caused the GBP

to collapse in the pound but manage to recover due to government intervention.

3. Asian financial crisis

Financial contagion in 1997 led to fears of an economic meltdown in Asia, which

could have in turn led to a worldwide economic meltdown. The crisis started in

Thailand, with an accumulation of foreign debt, leading Thailand almost to


The crisis led to the collapse of the Thai baht. Urgent measures were put in

place to save this important currency.

4. China's Undervalued Yuan

Between 1995 and 2005, China kept the renminbi stable at around 8.2 per dollar,

allowing its exports to gain momentum from what trading partners described as

"a currency that was unfairly suppressed and undervalued". China responded in

2005 to the rising chorus of complaints from the United States allowing its

currency to appreciate steadily, from over 8.2 RMB to about 6 RMB per dollar

within 8 years.

5. Japanese Yen's Gyrations

Japan's policy of zero interest rates favoured traders who borrowed Yen for

next to nothing and invested in higher yielding overseas assets. But with the

Economic crisis taking place in 2008, the Yen began appreciating by more than

25% against the U.S. Dollar and investors bought the currency at a quick pace

to repay yen-denominated loans. Then in 2013, Prime Minister Shinzo Abe

implemented monetary and fiscal stimulus plans that led to a 16% fall of the


6. Gulf War

The Gulf War in 1991 had a big impact on Iraq's economy. This was caused due to

the fact that the UN placed sanctions on the country which had the intended

effects on Iraq's financial system.

7. The Iraq War

The Iraq War started by the US in 2003, may have had its own hidden economic

cause. A theory behind this war was because Iraq had started trading oil in

Euros instead of Dollars and the country was benefiting from this change

leading the US economy to suffer.

8. European debt crisis

The Eurozone's biggest crisis came in 2008 as countries had been bailed out of

debt, leading to extensive recession and economic collapse. The fallout led to

a range of new regulations, changing the Eurozone's financial system. Countries

like Greece and Spain were two of the countries who suffered the most up until


9. Russian financial crisis

The collapse in the ruble includes plummeting oil prices and economic

sanctions; an indication in which external factors (i.e: commodities and

politics) can also affect a country's economy.

10. Brexit

UK's decision to exit the EU has caused the market to go downhill.

Namely, the GBP/EUR rate dropped from 1.34 to 1.24, and continued to drop to

1.17 in June 2016 and in 2018 the currency continued to collapse down to 1.13.

Other currencies reacted as follows:

- US dollar: Before Brexit, the

GBP/USD was trading at 1.49. The currency fell to 1.34 and then further

declined to 1.28.

- Australian dollar: Before Brexit,

The GBP/AUD was at around 1.96. The currency fell to 1.82 week after the

decision, then recovered to 1.87 and then fell further to 1.73.

- Canadian dollar: Before Brexit,

the GBP/CAD traded at 1.95 when it fell to 1.76. At a later stage the currency

recovered to 1.8 and fell to 1.67.

Now as we come to the end of this shocking countdown, there's no doubt that

these historical events have changed today's economy. Therefore, stay ahead of

news and keep your eye out for the upcoming economic events for any potential

trading opportunities with InvestMarkets.