What Are Forex Market Hours?
Foreign exchange (forex) market hours are the specified periods of time when traders and investors are able to conduct transactions in the foreign exchange market. The forex market is open five and a half days a week due to an overlap in hours, but local exchanges are closed during the weekend.These international currency markets are vital to facilitating business across the globe and are made up of banks, commercial companies, central banks, investment management firms, and hedge funds, as well as retail forex brokers and investors.
KEY TAKEAWAYS
- Forex market hours are the hours when markets for forex trading are open.
- The forex market is available for trading 24 hours a day except on weekends.
- The forex market is decentralized and driven by local sessions, four in particular: Sydney, Tokyo, London, and New York.
- Trading volume varies from session to session, although the highest volume tends to occur when the London and New York sessions overlap.
- The benchmark spot and forward exchange rates, used for daily valuation and pricing by many money managers and pension funds, are set at 4 p.m. London time.
Understanding Forex Market Hours
Forex market hours are the hours during which forex market participants all around the world can buy, sell, exchange, and speculate on global currencies. The forex market is open 24 hours a day during weekdays but geographically closes on weekends.
- New York: 8 a.m. to 5 p.m. (EST)
- Tokyo: 7 p.m. to 4 a.m. (EST)
- Sydney: 3 p.m. to 12 a.m. (EST)
- London: 3 a.m. to 11 a.m. (EST)
The chart below shows the actual hours that markets in each region are open in the global standard UTC time and where those sessions overlap.
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Image by Sabrina Jiang © Investopedia 2021 The two busiest time zones are located in London and New York. The period when these two trading sessions overlap (London afternoon and New York morning) is the busiest period. It accounts for the majority of volume traded in the day, with trillions of dollars in value changing hands.It is during this period that the WM/Reuters benchmark spot and forward foreign exchange rates are determined. The rates, which are set at 4 p.m. London local time, are used for daily valuation and pricing by many money managers and pension funds.
Forex trading starts in New Zealand but is called the Sydney session.
Special Considerations
Most Popular Currencies
While the forex market is a 24-hour market, some currencies in several emerging markets are not traded 24 hours a day.
High Volume and Pricing Efficiency
When trading volumes are heaviest, forex brokers will provide tighter spreads (bid and ask prices closer to each other), which improves pricing efficiency and 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.
Can I Trade Forex With $100?
Yes. You can start with as little as $1 and build your trades up over time.
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