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While a central bank has limited options for countering downwards pressure it can always counter upwards pressure (as demonstrated by Switzerland). What currency speculators can mainly do - and profit by - is break links.

Frank Schnittger:

Remember, it is possible for a medium sized shadow bank, hedge fund or venture capitalist to totally game a small currency like the punt - and almost impossible for an Irish central bank to counter such relatively large scale manipulation

I guess I am a bit at loss here. Yes, they can decrease a currency's exchange rate. But is this something that happens? Are there any examples of how they profit from this?

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by A swedish kind of death on Tue Sep 24th, 2013 at 04:05:12 AM EST
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