Forex trading hours: popular times to trade forex

What are the forex market trading hours?

Forex market trading hours refer to the times when the markets for forex trading are open – or in other words, when foreign exchange currency pairs can be publicly traded.

In Australia, you can trade forex on our regular weekday markets from 6am on Monday until 7am on Saturday (AEST). We offer some forex trading opportunities over the weekend as well, from 7pm on Saturday to 7:40am on Monday.

Importantly, our trading hours are based on UK hours and are converted to Australian time zones. This means that the times listed are affected by daylight savings hours in both the UK and Australia and will be adjusted by +/- 1 hour accordingly. This often catches out novice traders, particularly on days when the clocks change.

The forex market is decentralised and driven by local sessions. In theory, this means that there's no overarching central authority that governs the market. In practice, however, the market is self-regulated by a global network of Tier 1 financial institutions, among others.

There are three major overlapping trading sessions throughout the 24-hour day: the Asia-Pacific session, the European session, and the North American session. However, the Asia-Pacific session is often split into the Australian and Asian markets – and often, the sessions are named by financial hub cities: London, New York, Sydney and Tokyo.¹

The seven most traded currencies are available to trade 24 hours a day, every weekday:

• US dollar (USD)
• Euro (EUR)
• Japanese yen (JPY)
• British pound (GBP)
• Australian dollar (AUD)
• Canadian dollar (CAD)
• Swiss franc (CHF)

This means that you can almost always trade the most popular currency pairs between Monday and Friday, including the major currency pairs, AUD/USD, EUR/USD, USD/JPY, GBP/USD and USD/CHF. We offer trading opportunities on over 80 currency pairs on our CFD trading account.

For clarity, some emerging market currencies aren't available 24 hours a day. It's well worth checking the available trading hours for your desired forex pair before you begin trading, especially if it's somewhat exotic.

Trading the forex market on a weekend

Although the market may be closed, our platform allows you to trade three major currency pairs – GBP/USD, EUR/USD and USD/JPY – over the weekend, allowing you to react to moving markets.

Weekend trading gives you access to forex and index markets from Saturday evening to Monday morning. So, if news breaks and you see an opportunity to trade, you won't have to wait until the markets open again on Monday morning. Importantly, this means you can hedge your weekday position which isn't possible elsewhere.

However, weekend trading does come with some caveats. Weekend prices are quoted separately to their weekday counterparts and we don't have access to real-time data of underlying asset prices during weekend trading hours. Instead, we base weekend prices on market conditions including volatility, client activity and news flow to give you the most accurate pricing possible.

If you keep your weekend FX positions open after the Monday morning close, they'll roll over into regular weekday positions – with any attached stops or limits remaining in place.

Forex market hours in Australia

The forex market is open 24 hours on weekdays due to its session times rolling across the Sydney, Tokyo, London and New York time zones. This means you can trade it with us at any time between 6am Monday and 7am Saturday (AEST). Again, as Australia observes daylight saving time, these hours will be adjusted by +/- 1 hour accordingly.²

Forex trading is separated into two distinct categories:

• Spot forex – transactions executed at the market rate of the asset
• Forex options – derivatives which give you the right, but not the obligation, to buy or sell a currency pair at a certain strike price on or before a certain date

The table below shows the different AEST trading times for Australian-based forex traders using these instruments:

Weekend forex markets are separate from those that operate on weekdays. This means that to trade on weekends, you'd have to open a separate weekend position. Once the weekend ends, this separate weekend position will roll into a weekday one.

Further, it's important to remember that spot forex is available on weekends, which can be critical if you plan to use weekend forex trading to hedge your weekday positions.

When is the most popular time to trade forex?

The overlap between the European and North American sessions, which occurs from 10pm to 2am AEST (1pm to 5pm BST), is generally considered the most active and volatile period in the forex trading market. This can be appealing to traders with a high-risk appetite looking for greater rewards – and in particular, those looking to profit from exotic currency pairs.³

In general, a high-risk trader looking to profit from volatility finds that the most popular times to trade are when forex markets overlap in their trading times. This is because trading volume is elevated by two massive markets operating at the same time.

However, some traders might opt to trade outside the highly active hours and stick to popular currency pairs. Beyond this, it's worth noting there are always potential opportunities (which are, as usual, accompanied by a certain level of risk).

Traders should also pay attention to news releases, including macroeconomic data releases like employment, gross domestic product (GDP) and inflation, as well as announcements by central banks impacting interest rates.

To summarise, traders might want to consider their strategy, risk profile, forex pair of choice and time zone as more important than following the crowd.

How do overlaps in trading times affect forex?

Overlaps occur when two or more forex markets are open and operating at the same time. This can have a major impact on forex trading because liquidity is generally higher, making it a popular time to trade. These overlap periods enjoy positive feedback; because traders know there's more liquidity, this encourages them to trade which further increases liquidity.

This can make it a more attractive time to trade. High liquidity indicates that a currency pair can be bought and sold without significantly affecting its underlying price. For a day trader, this can bring benefits like price stability, low bid-ask spreads, efficient execution and lower trading costs.

And, because overlaps occur at peak times, they're also when you're most likely to find volatility in the market – though it's always worth remembering that volatility goes both ways.

There are three major forex markets that experience overlaps with each other: the Asian market, the European market and the North American market.

• Tokyo/London overlap: occurs between 5am and 6am AEST (8am to 9am BST)
• London/New York overlap: occurs between 10pm to 2am AEST (1pm to 5pm BST). This overlap is generally considered the most active and volatile period in the forex market
• Sydney/Tokyo overlap: occurs between 9am and 4pm AEST (12am to 7am BST)

How do news announcements impact forex markets?

While forex markets are subject to internal drivers based on technical analysis and market sentiment, news developments are the major external drivers of prices.

The value of a currency is tied to macroeconomic developments in its country of origin, which in turn affects demand for the currency.

For example, an interest rate cut by the Bank of England makes the pound easier to obtain, increasing supply and pulling down its value relative to other currencies where interest rates aren't falling. Conversely, an interest rate rise by the Bank of England makes the pound more attractive, increasing its value.

In forex markets, announcements like these, especially when they're unexpected, can have a major impact on the value of a currency pair. However, it's also the case that some pieces of news can be overinflated in importance and have little effect on the markets.

The five most important news announcements that affect forex markets are:

Interest rate decisions

Interest rate decisions affect the supply of currency in the country where those interest rate decisions have been made. If interest rates are unchanged in a comparison country, the pair will move up or down depending on the direction of interest rates in the first country.

CPI data

Inflation data like consumer price inflation (CPI) can have different ramifications on the forex market. Higher-than-expected inflation reads can devalue a currency and weaken it in a forex pair. Of course, it can also signal future interest rate increases by the country's central bank, increasing demand for the currency.

Central bank meetings

Interest rate decisions are often signalled by central banks well in advance, but final decisions are occasionally different to what prior rhetoric might suggest. Traders closely monitor the oratory of central bank governors to get hints of future monetary policy decisions.

GDP data

Economic growth data, including most importantly gross domestic product (GDP), can be another signal of demand for a country's currency. Stronger-than-expected GDP data can increase demand for a currency, while worse-than-expected data can reduce demand.

Unemployment rates

Unemployment is a driver of forex trading, given what it says about the wider economy. When unemployment gets too low, it can lead to increased expectations of interest rate rises, increasing demand for a currency through an anticipated drop in supply.

How do I start trading forex?

1. Choose a currency pair
2. Open a CFD account with us or practice with a demo account
3. Choose how you want to trade: spot forex or forex options
4. Decide whether to sell or buy
5. Set your stops and limits
6. Open and monitor your position

When you trade forex with us, you'll be taking a position on the value of one currency rising or falling against another using contracts for difference (CFDs).

When you trade forex CFDs, you're agreeing to exchange the difference in the price of a position from the point at which it's opened up until it's closed.

Spot (cash) forex trading is the most common way to trade forex and involves the real-time trading of the current price of currencies.

Forex options give you the right, but not the obligation, to buy or sell currency pairs before a specified expiry date. Unlike spot market forex, which works on current prices, you get daily, weekly, monthly and quarterly options.

It's absolutely critical to understand how CFDs work before you place a trade.

These products involve leveraged trading, which means you can open a larger forex trade on margin (with a small deposit). This means your losses as well as your profits can outweigh your margin amount as they're calculated on the full position size.

Before you start trading, you should carry out technical analysis and fundamental analysis on the two currencies in the pair. In other words, you should attempt to assess how the base currency (the left of the pair), moves in relation to the quote currency (the right).

You'd choose to 'buy' the pair if you expect the base currency to rise in value compared to the quote currency and ‘sell’ if you expected the opposite.

As the forex market is exceptionally volatile, it can make sense to set stops and limits. We offer normal stops, guaranteed stops, trailing stops and limit orders to help you manage your risk. If you've never traded forex before, it can be helpful to try out your strategy using a demo account.

Footnotes
¹ Forex Market Hours – Forex Market Time Converter – Babypips, 2024
² Forex Market Hours – 2024
³ Forex Market Hours – 2024