This article assesses the popular view that currency crises represent a prime example of the constraints that globalization imposes on government room to maneuver. We show that governments in fact have the possibility to respond to speculative pressure in different ways. Whether or not policymakers succumb to this pressure is not solely determined by economic factors but also a question of political considerations. Political preferences, institutions, and events significantly affect policy responses to currency crises. Our results suggest that national governments retain substantial short-run policy autonomy even in highly internationalized policy areas such as monetary and exchange rate policy.