http://www.economicshelp.org/blog/economics/currency-speculation-and-exchange-rate/ Economics Blog - current events and economics essays Mon, 22 Mar 2010 07:29:02 +0000 http://wordpress.org/?v=2.9.2 hourly 1 http://www.economicshelp.org/blog/economics/currency-speculation-and-exchange-rate/comment-page-1/#comment-1701 tejvan Wed, 22 Oct 2008 07:48:14 +0000 http://www.economicshelp.org/blog/?p=785#comment-1701 Thanks for comment. I take your point fixed exchange rates can be subject to speculative attacks. Though there are examples, where it does lead to periods of greater exchange rate stability than floating exchange rates. Thanks for comment. I take your point fixed exchange rates can be subject to speculative attacks. Though there are examples, where it does lead to periods of greater exchange rate stability than floating exchange rates.

]]> http://www.economicshelp.org/blog/economics/currency-speculation-and-exchange-rate/comment-page-1/#comment-1693 Haragan Tue, 21 Oct 2008 18:48:01 +0000 http://www.economicshelp.org/blog/?p=785#comment-1693 You've got it all backwards. Floating exchange rates reduce the risk of speculative attacks as currencies are allowed to be correctly priced by the market. Fixed exchange rates represent an arbitrary price that has to be backed up with international reserves whenever it is out of line with its true (fundamentals-based) value. These reserves are the bounty the speculators are after. You’ve got it all backwards. Floating exchange rates reduce the risk of speculative attacks as currencies are allowed to be correctly priced by the market. Fixed exchange rates represent an arbitrary price that has to be backed up with international reserves whenever it is out of line with its true (fundamentals-based) value. These reserves are the bounty the speculators are after.

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