Editor’s Letter : 20 Years of Global Finance

20 Years of Global Finance

It is almost 20 years since the first issue of Global Finance rolled off the presses on the eve of the 1987 stock market crash. In the intervening years, the worlds financial markets have undergone some remarkable changes, suffered some dramatic shocks and emerged from the fray more dynamic, more varied and more sophisticated than ever.

In celebration of our 20th anniversary, we will focus each issue this year on a different aspect of global finance, charting the highs and lows of the past two decades and offering analysis of the remarkable progress that has been made as well as a searching look at what the future might bring.

Fittingly enough, the first issue of this special anniversary series will spotlight the biggestand possibly fastest-growingfinancial market of all: foreign exchange. Our coverage begins on page 16 with an in-depth look at how and why the forex market has grown to the point where it now turns over nearly $3 trillion every day. With the fears for the dollars future far from eased, we assess the prospects for the beleaguered greenback in the months and years to come. We wrap up our special coverage with a close look at currency crises pastand possibly futureand, as every year, unveil our picks for the Worlds Best Foreign Exchange Providers.

Our spotlight on foreign exchange could not have come at a more crucial time for the worlds currency markets. Toward the end of 2006, the dollar finally succumbed to the pressure that had been mounting on it for several years and slid, none-too-gracefully, to a succession of multi-year lows against the euro and sterling. At the same time, US pressure on China to allow its currency to rise remains as intense as ever, even if it is shrouded in slightly more diplomatic language now that Hank Paulson is in charge at the US Treasury department.

Despite its recent slump, there is every indication that the dollar has further to fall. If that happens, what has so far been a relatively orderly rebalancing of exchange rates could get a whole lot messier. The fallout from a dollar rout would be far-reaching and severe, but it is by no means clear who the long-term winners and losers would be. The only thing that is certain, in fact, is that all eyes would, once again, be on the foreign exchange markets.

Until next month,

Dan Keeler