Economics Exchange Rate Systems Questions
Currency speculation refers to the practice of buying and selling currencies with the intention of making a profit from fluctuations in their exchange rates. Speculators engage in currency speculation by taking advantage of the differences in exchange rates between different currencies. They typically buy a currency when they believe its value will increase in the future and sell it when they expect its value to decrease. Currency speculation can be done through various financial instruments such as futures contracts, options, or simply by trading currencies in the foreign exchange market. It is a high-risk activity that requires a deep understanding of economic factors and market trends.