Hedging has a cost. It is the price an agent pays to convert an uncertainty to a certainty. Thus, there may be a tendency to remain unhedged and leave events in the lap of 5/6  BIS central bankers' speeches  gods. Should the market conditions turn hostile, there is a mad scramble to cut loss which exacerbates the market further.
This medium-term focus has been an enduring feature of PTAs to this day. The Bank 15 The MCI was a weighted summation of the exchange rate and short-term interest rate, with weights  reflecting each variable’s medium-term effect on aggregate demand and thus inflation.