An attempt is sometimes made to demonstrate the desirability of measures directed against speculation by reference to the fact that there are times when there is nobody in opposition to the bears in the foreign-exchange market so that they alone are able to determine the rate of exchange. That, of course, is not correct. Yet it must be noticed that speculation has a peculiar effect in the case of a currency whose progressive depreciation is to be expected while it is impossible to foresee when the depreciation will stop, if at all. While, in general, speculation reduces the gap between the highest and lowest prices without altering the average price-level, here, where the movement will presumably continue in the same direction, this naturally can not be the case. The effect of speculation here is to permit the fluctuation, which would otherwise proceed more uniformly, to proceed by fits and starts with the interposition of pauses. Ludwig Von Mises
About This Quote

Speculation is usually described as a market in which the price is determined by the overwhelming influence of a single buyer. However, this description can be misleading. Speculation can also occur in a market where there are many buyers, but the price is determined by the influence of many sellers. In such a case, speculation can be said to either depress or raise the price level.

Source: The Theory Of Money And Credit

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