The speculative or asset demand for money is the demand for highly liquid financial assets — domestic money or foreign currency — that is not dictated by real transactions such as trade or consumption expenditure.
Speculative demand arises from the perception that money is optimally part of a portfolio of assets being held as investments.
The net return on bonds is the sum of the interest payments and the capital gains (or losses) from their varying market value.
The asset demand for money is inversely related to the market interest rate.
As a result, more people will hold their wealth in money rather than bonds, i.e. the speculative balances will be greater at a lower interest rate.