Currency ________ typically involves the short-term movement of funds from one currency to another in the hopes of profiting from shifts in exchange rates.

Respuesta :

Answer:  speculation  

Explanation:  In simple words currency speculation refers to the process under which an individual holds some foreign currency with the hope of selling it at some higher and appreciated price.

Usually the parties involved in speculation purchases securities for a short period as their only motive is to make profit out of it. Long term holdings are done by individuals who are willing to buy foreign exchange for investment purposes.

Currency speculation affects its exchange rate as if the investors believe that the price of an exchange is going to rise in near future they will buy more of it leading to high demand which further rises the exchange rate.