other, and the price of gold was no longer fixed at $35 per ounce. The stage was set for speculation in both currencies and gold.
There are two basic types of currencies which float: free and managed. Free currencies are not subject to direct government intervention and because there are literally billions of units of the money available for trade by buyers and sellers. Traders who purchased dollars one day may sell them the next for yen, and so are not tied to any particular currency for themselves or those on whose behalf they may be working.
Managed currencies are subject to intervention by their governments; such intervention is normally undertaken when the government perceives the national interest to be at stake. Governments have an interest in the value of their currencies because strong currencies make their exports more expensive and less competitive, while relatively weaker currencies improve the outlook for exports. Since global trade is now the norm, maintaining a strong export trade i
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