1. Forex Trading Goes Retail
Forex trading was something that was once limited to banks, governments, and the very elite. As the world entered the first decade of the 2000's, forex became accessable to anyone with a few hundred dollars, an ID, and a computer.2. The Rise of the Euro
The Euro(EUR) was introduced in 1999. Shortly thereafter rumors began to surface that it would be the replacement for the US Dollar(USD) as the world reserve currency. Despite European officials denying that they would want anything of the sort, rumors persist. Investors sentiment helped the Euro to rise from $0.85 to $1.50 over the decade.
3. The Carry Trade Bubble
US Interest rate policy during the early 2000's led to an unending search for interest payments by professional money managers.
The most famous of these schemes to collect interest was the Yen(JPY) carry trade. Traders would hold interest yielding currencies against the Yen, which had a near zero interest rate, to collect the positive interest generated by whatever currency they were choosing to hold. This caused an extremely one sided trade for a number of years in which the Japanese Yen became one of the weakest currencies in the forex markets. This trade commonly had huge liquidations with moves that would erase months worth of trending in a matter of days.
The carry trade bubble was popped during the credit crisis of 2008.
4. The Birth of the Forex Scam
With the rise of the popularity of forex trading came the rise of the forex scam. Forex scams ranged from "High Yield Investment Programs" to Forex Robots that were actually just junk software that only made money for the people that were selling them.
5. Automated Forex Trading
It was only a matter of time before brokers and professional firms alike figured out a way to trade the forex market automatically. The first decade of the 2000's brought on complicated black box algorithm based trading. This type of trading is based on highly complex calculations made by world class computers from second to second.
It's been a good first full decade for forex trading. The future is likely going to be more and more complicated. What do you think are significant forex events seen in the first decade of the 21st century?