Fundamental investors and speculators do not necessarily sit easily together. They have different investment aims and parameters, the first looking for regular investment capital gain or income over time, the latter looking frequently for short, quick moves. Granted, this is a gross exaggeration and generalization, but it gives at least something of a flavour for [...]
Speculators Join the Crowd — The Local Currency Continues to Rally [theory]
Most speculators, though admittedly not all, are trend-followers. Thus, the longer the fundamental trend continues, the more trend-following speculators are attracted to what seems risk-free profit and thus ultimately the more speculative the trend becomes. As the exchange rate continues to appreciate, nominal interest rates to decline and capital inflows to continue, so the other [...]