The Bretton Woods system was the international monetary order established in 1944 at a conference in Bretton Woods, New Hampshire. Representatives from 44 countries agreed to peg their currencies to the US dollar, which was in turn convertible to gold at $35 per ounce.
The system created two institutions that still shape the global economy: the International Monetary Fund (IMF) and the World Bank. The IMF monitored exchange rates and provided short-term loans to countries facing balance-of-payments crises. The World Bank funded reconstruction and development projects.
Bretton Woods collapsed in 1971 when President Nixon ended dollar-gold convertibility (the "Nixon Shock"). The US was printing too many dollars to fund the Vietnam War and social programs, making the gold peg unsustainable. Since then, the world has operated on floating exchange rates — currencies find their value through market supply and demand.