ABSTRACT
A currency future is a contract for the sale or purchase of a standard quantity of one currency in exchange for another currency at a specified rate of exchange, and for delivery at a specified future time, normally in March, June, September or December. They are bought and sold on a futures exchange, the largest being the International Monetary Market division (IMM) of the Chicago Mercantile Exchange (CME). They allow financial institutions, investors and companies to trade in exchange rate risk, and can be used to hedge currency exposures.
