The Hedging Effectiveness of Currency Futures Markets

Dale, Charles (1981): The Hedging Effectiveness of Currency Futures Markets. Published in: Journal of Futures Markets , Vol. 1, No. 1 (1981): pp. 77-88.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Futures Markets; Hedging; Currency Futures
• Subjects: G - Financial Economics > G1 - General Financial Markets > G13 - Contingent Pricing ; Futures Pricing; G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency ; Event Studies ; Insider Trading; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets

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