If currency speculators decide that the value of the dollar should rise in the future relative to the yen,this will increase the demand for dollars and decrease the supply of dollars.

Question

Quizplus · Accepted Answer

Currency speculators who believe that the value of the dollar should rise in the future will buy dollars now in anticipation of selling them later at a higher price. This increase in demand for dollars will cause its value to appreciate, and at the same time, there will be a decrease in the supply of dollars as these speculators hold on to them.

If Currency Speculators Decide That the Value of the Dollar