Foreign exchange traders can be separated into two groups, hedgers and speculators.
Hedgers: include governments, companies (exporters and importers) and some investors. Adverse movements between their local or domestic currency and the foreign currency of the group they are either doing business with (for the exchange of goods and services) or investing in, will affect their bottom line. This is the core of all foreign exchange trading; however, it only makes up approximately 5% of the actual market.
Speculators: include banks, funds, corporations and individuals that create an artificial rate exposure in order to profit from the variations or movements in the price.