One trader’s profit is another’s loss

Although in the Forex market all traders seek to make profit from price fluctuations, exporters, importers, large investors and other market participants can also use currency exchange operations for different purposes. For them, short-term changes are not significant. The most common clients for such operations are export and import companies. By selling their products abroad, they obtain the currency of the importing country. But in order to invest in production, they need the currency of the country where their production is based. Banks (or brokers) execute necessary conversions on behalf of such companies. As each currency can be easily converted into another at the floating market rate, such operations may become a source of profit in themselves. Nevertheless, any financial market is a place of reallocation of resources.