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.
