Governments in several countries have blamed speculators for influencing the exchange rate without any economic justification.
From Pakistan and Qatar to Turkey, there have been rumblings in recent days against deep-pocketed currency manipulators.
The rupee, lira, and riyal have been deliberately thrashed, the governments say, mostly based on speculation and without major shifts in economic fundamentals.
Qatar this week brought lawsuits in London and New York against three banks including the First Abu Dhabi Bank of the United Arab Emirates, and Saudi Arabia’s Samba Bank.
Doha says the banks placed fictitious transactions in 2017 to drive down the value of its currency, the riyal, to weaken its economy in the wake of a diplomatic tussle with regional allies.
For the past two years, Saudi Arabia, the UAE, Bahrain and Egypt have imposed an economic boycott on Qatar, accusing it of supporting Iran and opposition groups in the Middle East.
Doha, which denies the charge, had to drawdown on its foreign currency reserves to prop up the riyal. But unlike gas-rich Qatar, other countries don’t have the financial muscle to support their currencies amid similar attacks.
However, before looking at such examples, it’s important to know what led to the rise of currency speculators.
How did it start?
Historically, the buying and selling of currency was used by businesses, which needed to make cross-border payments, or people requiring cash to travel abroad.
After the Second World War, the exchange rates were fixed under what was known as the Bretton Woods Agreement.
The strength of a country’s currency was based on its industrial competitiveness and the system served the international trade well for few years.
But in 1971, then US President Richard Nixon devalued the dollar, which Washington said was overvalued and hurting its manufacturers vis-a-vis foreign competitors.
A stronger currency makes exports expensive and makes it favourable to import goods from a country with relatively weaker currency.
Under the floating system, exchange rates began to fluctuate widely. And this is where financial institutions saw an opportunity - they could make money on simple trades.
More speculation than trade
At more than $5 trillion a day, the forex market is big. Most of it has nothing to do with actual commerce and reflects speculation on fluctuation in currency pairs - for instance US dollar gains against the euro.
Often traders short a currency, which basically means they bet on the value of one currency going down.
Such speculation can have adverse effects. In the case of Turkey, where the corporate sector is sitting over billions of dollars of foreign currency debt, this could mean lower profits for companies.
Turkish companies earning in liras but paying debt in US dollars would be hard-pressed in such a situation.
There’s a perception that traders don’t take a long-term view of an economy's strength and often make assumptions based on factors that could help them make quick profits.
But experts disagree.
More often speculators do tend to take account of key economic indicators such as amount of foreign exchange reserves, overall debt, and a government’s handling of its finances.
“It is usually the case that authorities complain about speculators when they do not like investors’ assessment of the fundamentals,” says Rob Hayward, a senior lecturer at Brighton Business School.
“Speculators are usually very aware of fundamentals.”
If the market, including speculators, saw Brexit as bad for the UK economy then they will sell the pound, he told TRT World.
But there have been instances when even multinational banks have colluded to manipulate foreign exchange markets simply for the sake of profit.
In 2015, the Citigroup, JP Morgan Chase, Barclays and Royal Bank of Scotland were fined more than $5.6 billion for fixing the US dollar and euro exchange rate.
They did this by secretly deciding when to make trades, influencing the supply and demand of currency, which in turn affected the exchange rate.
However, governments sometimes blame speculators while ignoring underlying economic issues, such as in Pakistan’s case.
Last week, authorities there began raiding offices of foreign currency dealers in what the government said was a crackdown against speculators who were hoarding US dollars to drive down the value of the rupee.
But the country has struggled for years to come up with ways to boost its foreign currency earnings - which basically means shoring up exports and attracting foreign investment.
A currency devaluation in such a scenario becomes not just imminent but necessary.