Currency Futures, Options, Derivatives, and Swaps

Forward exchange contracts had been available for decades, but it was not until the breakdown of the Bretton Woods system of fixed exchange rates and the resulting heightened volatility in currency prices that new foreign exchange risk management products started to appear. Futures contracts on foreign exchange were first introduced in May 1972 when the International Money Market of the Chicago Mercantile Exchange began trading contracts on the British pound, Canadian dollar, Deutsche mark, Japanese yen, and Swiss franc.