Usually, foreign exchange speculation can promote the exchange rate balance between the two countries, because speculators lock in the spread in the imbalance.

However, due to some reasons (often unbalanced economic development), the exchange rate will be extremely unbalanced. At this time, foreign exchange speculators will take advantage of this huge imbalance, use financial leverage to amplify this imbalance, and then forcibly balance it and make huge profits, causing a currency crisis in a country and even turning it into a full-scale financial crisis.

For example: Soros's famous campaign, stopping the pound, and the financial crisis in Southeast Asia.