The actions of the arbitrageurs in the foreign exchange markets:

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Arbitrageurs play an important role in foreign exchange markets by helping to ensure that exchange rates are equalized across all markets. By exploiting differences in exchange rates between markets, they buy and sell currencies to eliminate any discrepancy in their values. This helps to promote market efficiency and can lead to more stable exchange rates in the long run. While arbitrage can be risky, it is not inherently destabilizing to foreign exchange markets. It is also important to note that arbitrageurs are not the same as speculators, who are motivated by the potential for profit rather than the desire to eliminate pricing discrepancies.

The Actions of the Arbitrageurs in the Foreign Exchange Markets