The system is also, in some ways, fair. Just as, for example, it's widely believed that price and rent controls hurt more than they help, so too do government interventions in the currency market. As mentioned above, many even blame government intervention for volatility in the first place, as in the case of the Plaza and Louvre agreements. The biggest advantage of floating exchange rates is that they give each country control over its domestic affairs. Presumably, it knows best how to handle them, and it is to be hoped that knowledge of the workings of the free market will keep it from doing so irresponsibly.
Speculation can be a stabilizing force that demands responsible fiscal policy and money management.
Theoretically, intelligent domestic control of national economies will dampen currency volatility as well as improving the health of the economy itself. For all these reasons, floating exchange rates are the best system available to central banks at this time. The mechanism is certainly not without flaws, but it is the only truly feasible choice. Governments will always desert a fixed or targeted rate system, either when their reserves run out or when domestic inflation or recession becomes too severe. Sooner or later a gross imbalance will arise and it will be fixed either by the nation voluntarily leaving the system or by speculators foreseeing its demise and forcing it out.