Shani Shamah, John Wiley & Sons Ltd - Published 2004

Since the breakdown of the Bretton Woods agreement in the early 1970s, currencies of the
major industrial nations have fluctuated widely in response to trade imbalances, interest rates,
commodity prices, war and political uncertainty. In recent years, the pressure of governments
maintaining currency parity has led to the breakdown of quite a few exchange rate mechanisms
and has, thus, reinforced the need for companies, in particular, to take active foreign exchange
hedging decisions in order to prevent the erosion of profit margins.