There is a regular recurrence of controversy related to currency speculators and their effect on currency devaluations and national economies. Nevertheless, it has been argued by the economists including Milton Friedman that speculators ultimately are a stabilizing influence on the market and they are performing an important function and that is they are providing a market for hedgers and they are transferring risk from those people who don’t wish to bear it, to those who do. It is thought by other economists such as Joseph Stiglitz that this argument is based more on politics and a free market philosophy than on economics.

Main Professional Speculators

The main professional speculators are large hedge funds and other well capitalized "position traders". Individual traders could act as "noise traders", according to some economists,  and a more destabilizing role can be played by them than larger and better informed actors.

Speculation as a Highly Suspect Activity

In many countries currency speculation is considered as a highly suspect activity. It is considered that investment in traditional financial instruments like bonds or stocks can contribute positively to economic growth by providing capital, whereas currency speculation does not.

According to this view, it is nothing else but gambling that often interferes with economic policy. For example, in 1992, Central Bank of Sweden had been forced by currency speculation to raise interest rates for a few days to 500% per annum, and later to devalue the krona.

An opposing view has been reported by Gregory J. Millman, he compares speculators to "vigilantes" who simply help in the enforcement of international agreements and anticipate the effects of basic economic "laws" in order to profit.

In this view, unsustainable financial bubbles may be  developed by the countries  or otherwise their national economies may be mishandled by these countries, and foreign exchange speculators would illegally make the unavoidable collapse happen sooner. The critics of speculation are considered as such people who are trying to deflect the blame from themselves for having caused the unsustainable economic conditions.

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