On 15 August 1971 the US administration announced that the Treasury would no longer exchange dollars for gold at the fixed price, alongside a wage and price freeze and an import surcharge. The immediate cause was accelerating foreign claims on a shrinking US gold stock.
An attempt to rebuild fixed parities at new levels followed in December 1971, but it lasted barely a year. By early 1973 the major currencies were floating, and the modern foreign exchange market, with its 24-hour trading, forwards and options, grew out of the hedging demand that floating created.
Every convention in this glossary, from spot-date to the interbank-market itself, is a consequence of that transition.
Example: in the two years after the announcement the dollar fell heavily against the Deutsche mark and the yen. Currency risk moved from being a policy question to a daily business problem, which is what created the market.
Related: bretton-woods, free-float, spot-fx, interbank-market