# Who looses Forex if someone gains?

My understanding of forex exchange is that when there are two currencies cur1 and cur2, they are balanced in the world with a certain rate. People who buy cur1 at a high rate and sell in a lower rate effectively end up paying for the profit which someone has made by selling cur1 when the rate was high and buying when the rate was lower.

In a hypothetical world where no one sells their reserve of cur2 but people having cur1 reserves keep on buying cur2, how will the system be balanced? Who will gain or loose to compensate for the imbalance created? Please correct me if you think the question is incorrect or missing something.

• In this hypothetical world, how is someone buying cur2 if no one is selling it? – dismalscience Mar 6 '19 at 23:41
• I believe this was the missing link. You cannot buy a currency unless someone else sells it. But what does the whole transaction look in the big picture as a buyer is not aware from whom he/she is buying? Is it the banks who sell the currency? If you can explain the whole transaction, I will accept the answer. Thanks – smaug Mar 7 '19 at 14:23
• When particular currency become a commodity that allow massive future-trading/shorting, it works exactly like a commodity. – mootmoot Mar 7 '19 at 14:49