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About 70% to 90% of the foreign exchange transaction are speculative. In other words we can say that if the person or institution who bought or sold the currency has no plan to actually take delivery of the currency in the end, rather they were solely speculating on the movement of that particular currency. Hedge funds have gained a reputation for aggressive currency since 1996. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm interview by central banks to support almost any currency, if the economic fundamentals are in the hedge funds favor.
About 70% to 90% of the foreign exchange transaction are speculative. In other words we can say that if the person or institution who bought or sold the currency has no plan to actually take delivery of the currency in the end, rather they were solely speculating on the movement of that particular currency. Hedge funds have gained a reputation for aggressive currency since 1996. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm interview by central banks to support almost any currency, if the economic fundamentals are in the hedge funds favor.
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