Most contracts have physical delivery, so for those held at the end of the last trading day, actual payments are made in each currency.
On 15 August 1971, President Richard Nixon abandoned both the gold standard and the system of fixed exchange rates.
The CME established the International Monetary Market (IMM) and launched trading in seven currency futures on May 16, 1972.
If an investor will receive a cashflow denominated in a foreign currency on some future date, that investor can lock in the current exchange rate by entering into an offsetting currency futures position that expires on the date of the cashflow.
She can lock in this exchange rate by selling €1,000,000 worth of futures contracts expiring on December 1.
Currency futures can also be used to speculate and, by incurring a risk, attempt to profit from rising or falling exchange rates.
For example, Peter buys 10 September CME Euro FX Futures for €1,250,000 (each contract worth €125,000), at $1.2713 /€.