Even though self-fulfilling currency attacks lead to multiple equilibria when fundamentals
are common knowledge, we demonstrate the uniqueness of equilibrium when speculators
face a small amount of noise in their signals about the fundamentals. This unique
equilibrium depends not only on the fundamentals, but also on financial variables,
such as the quantity of hot money in circulation and the costs of speculative trading.
In contrast to multiple equilibrium models, our model allows analysis of policy proposals
directed at curtailing currency attacks.