The Hedging Effectiveness of Currency Futures Markets

Charles Dale

MPRA Paper from University Library of Munich, Germany

Abstract: Until very recently, commodity futures were largely ignored by the vast majority of economists. At the same time, markets for foreign currencies were studied by only a relative handful of specialists in international trade and finance. This article examines a subject which overlaps the two very arcane areas of commodity futures and foreign exchange markets, i.e., the hedging effectiveness of currency futures markets. In particular, the present work demonstrates that the futures markets for British pounds, German marks, and Japanese Yen have been as effective as hedging devices as have some of the long-established contracts in agricultural commodity futures.

Keywords: Futures Markets; Hedging; Currency Futures (search for similar items in EconPapers)
JEL-codes: G13 G14 G15 (search for similar items in EconPapers)
Date: 1981
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Citations: View citations in EconPapers (12)

Published in Journal of Futures Markets 1.1(1981): pp. 77-88

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:45839

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