When Is the Forex Market Closed?

The foreign exchange (forex) market is global and decentralized, operating through an electronic network connecting banks, financial institutions, and individual traders worldwide. This structure allows for continuous trading activity, making it a 24-hour market for much of the week.

Understanding Weekend Closures

The forex market observes a definitive closure period each week, primarily due to the cessation of institutional banking and global financial activity over the weekend. Trading typically begins on Sunday evening, around 5:00 PM Eastern Standard Time (EST), with the opening of the Sydney and Wellington sessions in the Asia-Pacific region. This marks the start of the new trading week as financial centers across the globe gradually come online.

The market then operates continuously through the Asian, European, and North American trading sessions. It concludes its weekly operations on Friday evening, around 5:00 PM EST, with the closing of the New York session. This weekend break is a universal standard, reflecting global banking holidays. During these hours, major financial institutions and banks are closed, leading to a complete halt in official trading.

Impact of Major Holidays

While the forex market does not entirely “close” for a single country’s public holiday, major global holidays significantly affect trading conditions. When key financial centers, such as London, New York, or Tokyo, observe a national holiday, the market experiences a noticeable reduction in liquidity. This occurs because large institutional participants in those regions are not actively trading, leading to fewer transactions overall.

Examples of holidays that commonly result in thinner trading volumes include Christmas Day, New Year’s Day, and national holidays in countries with major currencies like the United States (e.g., Thanksgiving) or the United Kingdom (e.g., bank holidays). Although trading platforms may remain open, decreased participation can lead to wider bid-ask spreads and increased price volatility. Traders should exercise caution during these periods, as erratic price movements can occur more readily.

Periods of Reduced Activity

Even during its 24/5 operational week, the forex market experiences specific times when activity levels are significantly lower, creating conditions that can feel like a partial closure. The most active periods typically occur during the overlap of major trading sessions, such as the London and New York sessions, which see peak liquidity and tighter spreads. Conversely, periods between these major overlaps often witness a substantial drop in trading volume.

Specifically, the late North American session and the early Asian session, after New York closes but before Tokyo opens fully, are characterized by notably reduced activity. During these quiet hours, fewer market participants are active, leading to a decrease in overall liquidity. Consequently, bid-ask spreads tend to widen, and price movements can become more erratic or unpredictable.