Historically, a currency war involves competitive devaluations by countries seeking to lower their cost structures, increase exports, create jobs and give their economies a boost at the expense of trading partners. This is not the only possible course for a currency war.
Most people don’t understand what derivatives are. Unlike stocks and bonds, a derivative is not an investment in anything real. Rather, a derivative is a legal bet on the future value or performance of something else. Just as one can bet on the horse, or the outcome of a sports game, financiers in London and New York make multi-billion dollar bets on how interest rates, foreign exchange rates, and share prices will perform in the future; or on what credit instruments are likely to default.