No, international exchange rates always have not been set by supply and demand. The current system of flexible exchange rates is relatively new.
For the first part of the twentieth century many nations were on the gold standard—that is, they backed their currency with gold and uniformly tied the value of their currency to a specific quantity of gold.
But during the Great Depression the United States weakened the link between their currencies and gold. After World War II, the United States and many other nations adopted a fixed rate of exchange at a conference held at Bretton Woods, New Hampshire.
The value of the dollar was pegged to a certain quantity of gold and foreign currencies were pegged to the dollar.
International Trade Law includes the appropriate rules and customs for handling trade between countries. However, it is also used in legal writings as trade between private sectors, which is not right.
International trade is a complicated area of law to research because there are numerous levels of trade organizations and interactions. There are bilateral trade agreements, regional trade agreements and multinational trade agreements. Each of these agreements has its own history, policies and dispute settlement procedures.