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How does speculation work?

How does currency speculation work?

  • Can someone explain to me how exactly currency speculation works? For e.g. if there is a current account deficit, it will be mostly financed by capital account surplus. What if the inflows to the capital account is speculative? What will happen if the currency appreciates or depreciates?

  • Answer:

    This is hypothetical question. All markets work on speculation and they are hedged against one another. Most of the trade in all markets is derivatives , so there is little time to analyse - rather no significance for academics like appreciation, trade deficit , bond yields etc.

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when it comes to investing, speculation works like a gamble. speculation is a bet as to what direction the market will take, up or down

not I said the ape

People like George Soros who hate America drive our currency into the ground and get rich.

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