Forex Trades That Make History – Stories from the Currency Markets

The forex market, with its daily turnover exceeding $7 trillion as of 2025, has always been a show stage for dramatic events and larger-than-life figures. While the average trader deals with charts and pips, the history of forex is dotted with monumental trades that not only made fortunes but also marked global economies, central bank policies, and even political landscapes. These stories highlight the interplay of strategy, risk, and timing in a market that’s open 24/5 and spans the globe. In this article, we’ll explore some of the most famous forex trading events and the individuals behind them, drawing from well-documented historical accounts to illustrate how single trades can ripple through financial systems. This is not Financial advice and not financial prediction, just and opinion.

The Birth of Modern Forex: From Bretton Woods to Floating Rates

To understand these legendary trades, it’s essential to start with the market’s evolution. The forex market as we know it today began taking shape after World War II. In 1944, the Bretton Woods Agreement established fixed exchange rates, pegging currencies to the U.S. dollar, which was convertible to gold at $35 per ounce. This system created stability but also vulnerabilities, as countries struggled to maintain their pegs amid economic pressures.

By the early 1970s, inflationary pressures in the U.S. led President Richard Nixon to suspend the dollar’s gold convertibility in 1971, known as the “Nixon Shock.” This effectively ended Bretton Woods, ushering in floating exchange rates by 1973. Suddenly, currencies could fluctuate freely based on supply and demand, opening the door for speculative trading. Banks, hedge funds, and individual traders could now profit (or lose) from these movements, setting the stage for the epic trades that followed.

George Soros and Black Wednesday: The Trade That Broke the Bank of England

One of the most iconic forex events occurred on September 16, 1992, a day forever etched in financial lore as “Black Wednesday.” At the center was George Soros, a Hungarian-born investor who had built his reputation through his Quantum Fund.

The backdrop was the European Exchange Rate Mechanism (ERM), a system designed to stabilize currencies in preparation for the euro. The British pound was pegged to the German mark within a band, but high German interest rates after reunification made it expensive for the UK to maintain the peg amid its own recession. Soros and his team spotted the vulnerability: the Bank of England (BoE) was defending an overvalued pound with limited reserves.

Soros began shorting the pound in massive volumes, borrowing and selling billions worth, betting it would devalue. Other big speculators joined, amplifying the pressure. On Black Wednesday, the BoE raised interest rates from 10% to 12%, then promised 15%, and spent over £3 billion in reserves trying to prop up the currency. It failed. The UK exited the ERM, and the pound plummeted 15% against the mark and 25% against the dollar in days.

Soros’s fund reportedly profited $1 billion from the trade. This event exposed the limits of fixed exchange systems and accelerated the shift to floating rates across Europe. It also highlighted how leveraged positions in forex could challenge even sovereign institutions, a theme that resonates in today’s volatile markets.

Andy Krieger and the Kiwi Crush: Betting Against the New Zealand Dollar

Another legendary figure is Andy Krieger, a currency trader at Bankers Trust in the late 1980s. Krieger’s most famous trade came in the aftermath of the 1987 stock market crash, known as Black Monday, when global equities plunged over 20% in a single day.

It is said that in the chaos, Krieger noticed the New Zealand dollar (NZD, or “Kiwi”) was overvalued relative to its economic fundamentals. With the blessing of his firm, he shorted the NZD using options, effectively selling positions worth a lot of millions.

The trade paid off as the Kiwi depreciated sharply, netting Bankers Trust an estimated $300 million profit. However, It is said that Krieger resigned shortly after, citing dissatisfaction with his bonus (a mere $3 million on such a massive gain). This story underscores the scale possible in forex due to leverage and how post-crash volatility can create opportunities for contrarian bets.

The Swiss Franc Shock of 2015: When Pegs Break Unexpectedly

Not all famous forex events involve individual traders; some are market-wide shocks. On January 15, 2015, the Swiss National Bank (SNB) abruptly removed its cap on the Swiss franc (CHF) against the euro, which had been in place since 2011 to prevent excessive appreciation.

The announcement caused the EUR/CHF pair to drop 30% in minutes, the largest single-day move in forex history. Some brokers went bankrupt, and traders with leveraged positions faced massive losses. This event highlighted the dangers of low-volatility environments lulling traders into complacency, only for sudden policy shifts to cause chaos.

The Asian Financial Crisis of 1997: A Regional Forex Meltdown

The 1997 Asian Financial Crisis began with the devaluation of the Thai baht in July, triggering a chain reaction across Southeast Asia. Speculators, including hedge funds, shorted overvalued currencies pegged to the USD, exposing weaknesses in fixed-rate systems burdened by debt and current account deficits.

Currencies like the Indonesian rupiah fell, and stock markets plunged. This crisis led to IMF bailouts and reforms

Recent Echoes: The 2022 USD Surge and Carry Trade Unwinds

In 2022, as the Fed hiked rates aggressively to combat inflation, the USD strengthened dramatically against major currencies. Traders who shorted the dollar earlier faced losses, while those long on USD/JPY profited from the widest rate differentials in decades.

The subsequent carry trade unwind in mid-2024, when Japan’s rate hikes reversed the trend, caused sharp volatility, reminding traders of the risks in low-volatility carry strategies.

Lessons from These Stories

These historical forex events reveal patterns: overvalued pegs are vulnerable, policy shifts create opportunities, and leverage amplifies both gains and losses. They also show how global interconnectedness means one currency can affect entire economies.

From Soros’s bold shorts to crisis contagions, these stories captivate because they blend human ingenuity with market forces. For traders, they serve as case studies in risk management and timing.