I'll answer your two questions in reverse order:
Are there people who use this method to make money?
Yes, definitely. This is called currency trading, and many people and funds do that. You basically make a bet on the evolution of a currency pair, like you would bet on the price of a company stock going up, or on the price of a property going up, etc.
The best known currency trader is probably George Soros with this Quantum Fund, and his bet against the British Pound, in which he made over $1 billion. There are a few other similar examples.
Is this method legal?
This depends a lot on where you are. Some countries have very strict currency controls (you can't exchange your local currency for foreign currency without a lot of justification), others are very liberal and let you do anything, while others still are somewhere in between.
Some countries will also require you to hold some form of licence or authorisation if you want to do that for a living.