Speculative attacks on a currency usually occur when the currency is allowed to ﬂoat freely.

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Speculative attacks on a currency can occur under both floating and fixed exchange rate systems, but they are more commonly associated with fixed or pegged exchange rate regimes, where the currency's value is artificially maintained at a certain level. Speculators may attack a currency they believe is overvalued or unsustainable in its peg, leading to a forced devaluation or abandonment of the peg.

Speculative Attacks on a Currency Usually Occur When the Currency