Money
Sir: In your leader of 29 May You write: 'Once a currency is floating its fate is in the hands of literally thousands of currency dealers the world over: the object of their operation is to make money ...'
Their object is to provide a necessary ser
vice for which they will be rewarded according to their business acumen. The main reason for a currency's weakness is that those who require sterling to pay for British exports buy and sell in the shortest possible time while those who must buy foreign currency with sterling do so quickly and take longer to sell. These leads and lags have a devastating effect and are practised not by 'speculators' but by tourists, governments and firms who are not 'out for a quick profit'.
Speculators or 'those who want to make money' perform an important function in any market but there are as many losers as winners. The long-tern: value of a currency is not 'decided', it is the result of market confidence based on past performance.
Rodney E. B. Atkinson Johannes Gutenberg-Universitat, Mainz
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