In this article brought to you by Doo Prime, we learn in an in-depth manner on When Forex Market Opens ? and why it is important that we understand the Forex Market’s Opening Hours.
Forex Market Hours
Forex market hours are the schedule by which Forex market participants can buy, sell, exchange, and speculate on currencies all around the world. The Forex market is open 24 hours a day during weekdays hours, but closed on weekends. With time zone changes, the weekend gets squeezed.
The Forex market opens on Monday morning at 8 AM, local Sydney, Australia (which equates to Sunday night 7PM, in New York City, under Eastern Time).
During these trading hours, traders in the Forex market can execute trades through various trading conditions.
Understanding Forex Market Hours
International currency markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, as well as retail Forex brokers and investors around the world. As the Forex market operates in multiple time zones, it can be accessed at any time except for the weekend break.
The international currency market isn’t dominated by a single market exchange but involves a global network of exchanges and brokers around the world. Forex trading hours are based on when trading is open in each participating country. While the time zones overlap, the generally accepted time zone for each region are as follows :
New York 8.00 a.m. to 5.00 p.m. EST (1.00 p.m. to 10.00 p.m. UTC)
Tokyo 7.00 p.m. to 4.00 a.m. EST (12.00 a.m. to 9.00 a.m. UTC)
Sydney 5.00 p.m. to 2.00 a.m. EST (10.00 p.m. to 7.00 a.m. UTC)
London 3.00 a.m. to 12 noon EST (8.00 p.m. to 5.00 p.m. UTC)
The two busiest time zones are London and New York. The period when these two trading sessions overlap (London afternoon and New York morning) is the busiest period and accounts for the majority of volume traded in the $5 trillion a day market. It is during this period where the Reuters/WMR benchmark spot foreign exchange rate is determined. The rate, which is set at 4.00 p.m. London time is used for daily valuation and pricing for many money managers and pension funds.
While the Forex market is a 24-hour market, some currencies in several emerging markets, are not traded 24 hours a day. The seven most traded currencies in the world are the U.S. Dollar, the Euro, the Japanese Yen, the British Pound, the Australian Dollar, the Canadian Dollar, and the New Zealand Dollar, all of which are traded continuously while the Forex market is open.
Speculators typically trade in pairs crossing between these seven currencies from any country in the world, though they sometimes favor times with heavier volume. When trading volumes are heaviest, Forex brokers will provide tighter spreads (bid and ask prices closer to each other), which reduces transaction costs for traders. Likewise, institutional traders also favor times with higher trading volume, though they may accept wider spreads for the opportunity to trade as early as possible in reaction to new information they have.
Despite the highly decentralized nature of the Forex market it remains an efficient transfer mechanism for all participants and a far-reaching access mechanism for those who wish to speculate from anywhere on the globe.
Key Takeaways
- The Forex market is available 24 hours a day except for weekends.
- The Forex market is decentralized and driven by local sessions, four in particular: Sydney, Tokyo, London, New York.
- Trading volume varies from one session to another.
- The highest trading volume occurs when the London and New York session overlap.
- Spot prices for the day are set during the London/New York period.
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