During the end of world war II, virtually the entire world was undergoing so much chaos which majority of the western governments did feel the dare need to come up with a system that would stabalise worldwide Economy.
Commonly Identified as the “Bretton woods System,” this treaty did set all currency’s exchange rate against the gold. This system did established the entire exchange rates for just sometimes unfortunately, while the major world’s economy was growing and changing at different speeds, the rules governing the operation of the system become obsolete and limiting for that matter.
Soon enough, in the year 1971, Bretton Woods Agreement got done away with and received a replacement by another currency valuation system. Read more