Currency Trading Sessions by Geographical Area

The forex market is open 24 hours a day, Monday morning in the Asia-Pacific time zone through Friday closing in New York. Trading can be divided up into three geographical areas, each with its own unique makeup and influences. An awareness of these areas and their affect on the overall market will assist an investor in his trading decisions.

  • Trading in the Asia-Pacific Session

The main financial trading centers in this area are Wellington, New Zealand; Sydney, Australia; Tokyo, Japan; Hong Kong and Singapore. They comprise around 22 percent of the total daily global volume.  News and data reports from any of these regions will influence trading.

However, news from China has become a major player in global markets. China is the second largest national economy after the United States. As of 2010, it is also the world’s leading exporter. In addition, China holds more than $2.6 trillion in currency reserves. Over half of this amount was loaned to the U.S. Treasury debt. It is obvious how any shifts in China’s currency reserve policies, growth or decline easily sends the global market into a flurry.

  • Trading in the European/London Session

The European/London session opens about half-way through the Asia-Pacific session’s trading day. It makes up more than 55 percent of the total daily global trading volume. By itself, London accounts for more than a third of the total daily global trading volume. The European session often follows the trends that began in the Asia-Pacific session. Except, these trends only become more pronounced due to the trading volume that occurs here.

  • Trading in the North American Session

The North American session takes credit for just under 20 percent of the global daily trading volume. The biggest market movement occurs during the time period where the European and North American session overlap which is around 7 a.m. and noon ET. Afternoon trading can be sluggish.

 

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