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International Trade - International Trade Speculator an...

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International Trade Speculator – an investor who purposely accepts exchange rate risk in the foreign currency market. Speculators buy and sell foreign currencies in anticipation of favorable changes in rates. Hedging – the sale or purchase of a forward exchange contract to offset a possible exchange rate loss. Arbitrageur – an investor who simultaneously buys foreign currency in one market and sells in another market at a slightly higher price. Balance of Payments – embraces all payments made by one nation to another, including capital movements. Balance of Trade – the difference between imports and exports of goods and services over a given period; thus, a balance on the goods transactions in the current account. In T-account form, exports are credits and imports are debits. Assuming that a credit balance reflects a positive balance of trade, imports will decrease a positive balance while exports will increase it.
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