APFIVE Speculator Expectations and Currency Depreciation
What will likely happen if speculators expect that the dollar will depreciate in the near future?
A
Speculative expectations have no impact on the foreign exchange market because they are already factored into current rates.
B
The Federal Reserve will intervene immediately to prevent any changes in the dollar’s value due to speculation.
C
They will sell dollars, which in turn accelerates the depreciation of the currency.
D
They will buy more dollars in anticipation of a rebound, causing the dollar to appreciate.