FX trading sessions: how liquidity moves around the clock

Foreign exchange trades over the counter between banks, funds, companies and brokers all over the world. There is no opening bell. The Australian Foreign Exchange Committee, a market forum sponsored by the Reserve Bank of Australia, describes the market as able to operate 24 hours a day, with normal trading running from 5am Sydney time on Monday to 5pm New York time on Friday.

Within that window, activity rises and falls as the world’s financial centres wake up and go home. Traders call these phases sessions.

The four sessions

The sessions are conventions rather than rules, and different sources draw the boundaries slightly differently. Broadly:

• Sydney opens the week and the trading day. Activity centres on the Australian and New Zealand dollars.
• Tokyo brings in Japanese banks, exporters and investors, together with the wider Asian centres of Singapore and Hong Kong.
• London is the largest single centre. Its morning overlaps with the Asian afternoon.
• New York opens while London is still trading and carries the market into the North American afternoon.

The geography of trading is heavily concentrated. In the Bank for International Settlements’ 2025 Triennial Survey, sales desks in the UK accounted for 37.8% of global FX trading in April 2025, the US for about 19%, Singapore for 11.8% and Hong Kong for 7%. Those four centres together handled three-quarters of the market.

Why the overlaps matter

When two centres are open at once, more dealers are quoting and more clients are trading. The London and New York overlap, which typically runs for several hours from the New York morning to the London close, brings together the desks responsible for more than half of reported turnover. It is also when the widely used WM/Reuters 4pm London benchmark rates are set, which concentrates flows from fund managers and companies.

The Asia and London overlap is shorter but meaningful, especially for yen and Asian currency pairs.

By contrast, the late New York afternoon is the quietest part of the day. North American desks are winding down, and Asian centres have not fully opened. Liquidity is thinner, and thin markets can move sharply on relatively small orders.

The quietest hour of the FX day falls between the New York close and the Asian morning.

That is not a theoretical risk. When sterling fell abruptly on 7 October 2016, it did so during early Asian trading hours. A BIS Markets Committee report into the episode, published in January 2017, identified the time of day as one of the factors that contributed to the move.

Rollover and the weekly open

The FX trading day ends at 5pm New York time. At that point, open spot positions are rolled to the next value date and brokers apply overnight financing. Several things happen together around this moment: dealers reset their books, some liquidity providers pause or widen their quotes, and trading in the new day is still thin.

The result is familiar to anyone who has watched a trading platform at that hour. Spreads widen, sometimes dramatically, for a few minutes before settling back. Stop orders placed close to the market can be filled at prices that look out of line with the rest of the day.

The Monday open follows a similar logic. Prices resume after a weekend in which news has accumulated but almost nothing has traded, so the first quotes can gap away from Friday’s close and spreads start wide until more participants arrive.

Daylight saving shifts

Session times shift during the year because countries change their clocks on different dates, and some do not change at all.

• The United States moves to daylight saving time on the second Sunday in March and back on the first Sunday in November.
• The UK moves its clocks forward on the last Sunday in March and back on the last Sunday in October.
• New South Wales, home to Sydney, starts daylight saving on the first Sunday in October and ends it on the first Sunday in April.
• Japan does not observe daylight saving.

For a few weeks each spring and autumn, the usual gap between London and New York narrows from five hours to four, so the overlap starts an hour earlier in London terms. The Sydney session also moves relative to Europe by two hours across the year, because its clocks change in the opposite season.

Traders who schedule orders, news trading or automated strategies by local time should check these dates each year. A strategy set to trade “the London open” can quietly start trading an hour early or late if its server clock and the market’s clocks drift apart.

Practical points

• Spreads and fills are generally best when several major centres are open.
• Expect wider spreads around 5pm New York time and at the weekly open.
• Check your broker’s server time zone, and how it handles daylight saving.
• Holidays in one major centre can thin liquidity across the whole market.