Fixed exchange rates eliminate both hedging demand and speculation rationale for currency futures

Evidence

With exchange rates fluctuating only in very limited bands, trading currency futures would be unattractive: there would be no need to hedge against adverse fluctuations, and little point in speculating. — Donald MacKenzie, An Engine, Not a Camera, 645

Categorization

• XREF: connects to: Currency pegs fail when markets can bet against limited reserves and force devaluation. — Mark Blyth, Austerity: The History of a Dangerous…, 213; Floating exchange rates created the risk exposure that currency futures were designed to hedge — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 656; Fixed exchange rates force austerity when competitiveness declines (+4 more)

Broader Connections

• Floating exchange rates created the risk exposure that currency futures were designed to hedge #corroborates (0.90) — Donald MacKenzie, An Engine, Not a Camera, 656
• Fixed exchange rates force austerity when competitiveness declines #expands (0.80)
• A fixed exchange rate regime forces member countries to resort to internal devaluation #expands (0.80) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 125
• The gold standard rigidly subordinated domestic welfare policies to fixed exchange rates #expands (0.75) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 414
• Derivatives are speculative techniques betting on future asset-price movements #exemplifies (0.72) — Max Haiven, Cultures of Financialization, 153