Question

Why is it okay to speculate on Currency?

Answer 1

The currency speculation involves speculative investing on the purchase of a foreign currency. It involves a substantial risk of losing value however there is an expectation of a significant gain also. The most difficult and challenging aspect in speculation is doing of speculating i.e. to make a decision when it is the right time to buy and sell. To make it successful speculator should have a keen knowledge of economics and finance, and also the current political and economic events. Also the forward exchange markets and gathering information on what makes a healthy economy (such as rate of inflation, unemployment, and growth of productivity, etc) can help the speculator in speculating. When the local governments enact policies which tends to reduce the short-term profitability of industrial and financial businesses can be taken as signs to sell a currency, and on contrary the policies opening or expansion of profit opportunities will be read as reasons to buy a currency