The foreign exchange market, or forex, is the largest and most liquid financial market in the world. It operates 24 hours a day, 5 days a week, except for weekends and some public holidays. Christmas is one such holiday that affects the forex market, as it is celebrated worldwide on December 25th. In this article, we will explain when the forex market opens during Christmas and what traders should expect during this period.
The forex market follows a global time zone, with different trading sessions in different parts of the world. The major trading centers are located in London, New York, Tokyo, and Sydney, which means that the forex market is most active during the overlap of these trading sessions. During Christmas, however, the trading schedule is affected by the public holidays observed in these regions.
Generally, the forex market closes on December 24th at 5 pm EST (10 pm GMT) and remains closed for Christmas Day. Trading resumes on December 26th at 5 pm EST (10 pm GMT) for the Asian session. However, the liquidity and volatility during this period are generally lower than usual due to the reduced trading activity and the absence of some market participants.
During the Christmas period, traders may notice a decrease in trading volume, which can lead to wider bid-ask spreads and slippage. This happens because many traders and investors take time off from the market to celebrate with their families and friends. As a result, the market becomes less liquid, and large orders can move the price significantly, creating more risk for traders.
Moreover, some trading instruments may be affected more than others during the Christmas period. For example, currencies that are closely tied to the economies of the countries that celebrate Christmas, such as the US dollar, the British pound, and the Euro, may experience more volatility due to the reduced liquidity. Conversely, currencies from regions that do not observe Christmas, such as Japan and Australia, may see less impact on their trading activity.
Another factor that can affect the forex market during Christmas is the release of economic data. Although most major economic indicators are not released during the holiday period, some countries may still release important data that can have an impact on the exchange rate. Traders should check the economic calendar to stay informed about any upcoming events that may affect their trading decisions.
In conclusion, the forex market operates 24 hours a day, 5 days a week, except for weekends and public holidays. During Christmas, the market closes on December 24th and remains closed on December 25th. Trading resumes on December 26th for the Asian session, but the liquidity and volatility are generally lower than usual due to the reduced trading activity and the absence of some market participants. Traders should be aware of the possible impact of the Christmas holiday on their trading activity and adjust their strategies accordingly.
