The expectations of speculators in the United States that the exchange rate for the euro will fall in the future will increase the supply of euros in the foreign exchange market and decrease the exchange rate for the euro.

Question

Quizplus · Accepted Answer

If speculators expect the exchange rate for the euro to fall in the future, they will sell euros in anticipation of the future price decrease. This will increase the supply of euros in the foreign exchange market, putting downward pressure on the exchange rate for the euro.

The Expectations of Speculators in the United States That the Exchange