The forex market operates 24 hours a day, five days a week—but not all days are created equal. Public holidays in major financial centres can dramatically alter liquidity, spreads, and volatility. This guide explains what forex market holidays are, why they matter, how to prepare for them in 2025, and the risks that every trader should understand before trading during these periods.
Forex market holidays are days on which major financial centres around the world close for public or national holidays. While the interbank forex market is often said to be open 24 hours a day, five days a week—from the Sunday evening Asian open to the Friday New York close—it does not operate at full capacity on holidays. On these days, financial institutions, banks, and other major liquidity providers in affected regions are closed, which reduces overall market participation.
The Bank for International Settlements (BIS) estimates that the global foreign exchange market handles over $7.5 trillion in daily turnover on an average day. However, on major holidays, this volume can drop by as much as 50% or more, leading to thinner order books and less predictable price behaviour.
It is important to distinguish between forex market holidays and trading session closures. While the market remains technically open for electronic trading, the absence of key participants—such as central banks, commercial banks, and institutional traders—means that prices may not reflect true market sentiment and can be easily swayed by relatively small orders.
The impact of a market holiday on forex trading depends on the specific holiday, the region affected, and the currency pairs being traded. Understanding these dynamics is essential for managing risk effectively.
The most direct effect of a market holiday is reduced liquidity. When the major financial centres of a region are closed, the volume of orders flowing through the market decreases sharply. This can lead to wider bid-ask spreads, as market makers charge more to compensate for the increased risk of holding positions in a thin market.
Paradoxically, lower liquidity can sometimes lead to higher volatility on holidays, especially in the absence of major news or economic data. With fewer market participants, a relatively small order can move the price significantly, resulting in sharp and unpredictable price spikes.
Spreads typically widen during holidays as liquidity providers adjust their pricing to reflect the increased cost of executing trades in a thin market. On major holidays such as Christmas and New Year, spreads on major pairs like EUR/USD can widen from their usual 0.5–1.0 pips to 2–5 pips or more.
With fewer orders in the market, there is a higher risk of slippage—where orders are filled at a different price than expected—particularly for larger trades or market orders. Stop-loss orders may also be more prone to gapping, especially if the market jumps over the stop level in thin liquidity.
The Commodity Futures Trading Commission (CFTC) has highlighted the risks of trading during periods of low liquidity in the forex market, advising retail traders to use limit orders rather than market orders and to be prepared for wider spreads and increased slippage.
The table below lists the most significant public holidays in 2025 that affect major forex trading centres. These dates are based on publicly available calendars from central banks and financial regulators, but traders should always confirm specific dates with their broker, as exact observance can vary by jurisdiction.
| Date | Holiday | Affected Region | Impact on Liquidity | Currency Pairs Most Affected |
|---|---|---|---|---|
| 1 Jan 2025 | New Year's Day | Global (most major centres) | Extremely low | All major pairs |
| 20 Jan 2025 | Martin Luther King Jr. Day | United States | Reduced | USD pairs |
| 17 Feb 2025 | Presidents' Day | United States | Reduced | USD pairs |
| 18 Apr 2025 | Good Friday | Europe, US, UK, Australia, NZ, Canada | Very low | All major pairs |
| 21 Apr 2025 | Easter Monday | Europe, UK, Australia, NZ | Low | EUR, GBP, AUD, NZD pairs |
| 1 May 2025 | International Workers' Day | Europe, Asia, parts of US | Reduced | EUR, GBP pairs |
| 5 May 2025 | May Day (UK) | United Kingdom | Reduced | GBP pairs |
| 26 May 2025 | Spring Bank Holiday (UK) | United Kingdom | Reduced | GBP pairs |
| 4 Jul 2025 | Independence Day | United States | Reduced | USD pairs |
| 25 Aug 2025 | Summer Bank Holiday (UK) | United Kingdom | Reduced | GBP pairs |
| 27 Nov 2025 | Thanksgiving Day | United States | Very low (Thu) & extremely low (Fri) | USD pairs |
| 24 Dec 2025 | Christmas Eve (early close) | Global (partial) | Low | All major pairs |
| 25 Dec 2025 | Christmas Day | Global (most major centres) | Extremely low | All major pairs |
| 26 Dec 2025 | Boxing Day | UK, Australia, NZ, Canada | Very low | GBP, AUD, NZD pairs |
| 31 Dec 2025 | New Year's Eve (early close) | Global (partial) | Low | All major pairs |
Note: This table is for informational purposes only. Holiday schedules can change, and exact observance may vary by jurisdiction. Always confirm dates and trading hours with your broker before making trading decisions.
The Federal Reserve publishes a holiday schedule for the US financial system, while the Bank of England and the European Central Bank publish similar schedules. These are the most reliable sources for official holiday dates in their respective jurisdictions.
Understanding forex market holidays is not just an academic exercise—it has practical implications for every trader. Below are some of the most common use cases for holiday awareness.
The primary use of holiday awareness is risk management. By knowing when liquidity will be thin, traders can adjust their position sizes, stop-loss levels, and trading schedules to avoid unexpected volatility and slippage.
Traders often plan their trades around economic data releases. On holidays, data releases may be delayed or cancelled, and the market reaction may be muted or unpredictable. Being aware of holidays prevents mis-timed entries and exits.
Wider spreads during holidays directly increase trading costs. Scalpers and day traders, in particular, may find that their strategies become unprofitable during holiday periods due to the inflated cost of entry and exit.
Traders who leave positions open over long holiday weekends (e.g., Christmas or Thanksgiving) face the risk of gap opens when the market resumes. Awareness of holidays helps traders decide whether to close positions before the holiday or adjust their risk accordingly.
David is a day trader based in London who trades EUR/USD and GBP/USD. In late December 2025, he checks his broker's holiday calendar and sees that trading will be extremely thin on Christmas Eve and Christmas Day, with markets closing early on 24 December and remaining closed on 25 December.
Instead of leaving his positions open over the holiday, David closes all his trades on 23 December. He also avoids placing new trades on 24 December, as he knows that spreads will be unusually wide and that any price movements could be erratic. He takes the opportunity to step back, review his trading performance for the year, and plan his strategy for January 2026. His proactive approach saves him from the risk of being caught in a low-liquidity spike or gap, preserving his capital for the new trading year.
Before trading on or around a public holiday, it is essential to evaluate the current market conditions. Here are the key criteria to assess.
The first step is to check your broker's official holiday schedule. Brokers typically publish a calendar of affected dates and may also announce specific changes to trading hours, spreads, or margin requirements. Some brokers may close certain instruments entirely on major holidays.
Assess the current liquidity level by monitoring the bid-ask spread on your preferred currency pairs. A widening spread is a clear sign that liquidity is decreasing and that trading conditions are becoming less favourable.
Check the economic calendar to see if any important data releases coincide with the holiday. In some cases, data may be released on a holiday, but with fewer market participants, the reaction can be exaggerated or muted. In other cases, the data release may be postponed to the next business day.
While holidays often bring lower liquidity, they can also bring sudden spikes in volatility if unexpected news emerges. Be prepared for price gaps, especially around market opens following a holiday closure.
The National Futures Association (NFA) has advised traders to be particularly cautious during holiday periods, noting that reduced liquidity can lead to significant price gaps and that stop-loss orders may not be executed at the desired price.
The table below contrasts the typical trading conditions on a normal trading day with those on a market holiday. This comparison helps illustrate why holiday trading carries elevated risk.
| Characteristic | Normal Trading Day | Market Holiday | Impact on Trader |
|---|---|---|---|
| Liquidity | High (deep order books) | Reduced to very low | Wider spreads, higher slippage risk |
| Spreads | 0.5–1.0 pips (major pairs) | 2–5+ pips (major pairs) | Increased transaction costs |
| Volatility | Moderate to high (during sessions) | Erratic, often unpredictable | Higher risk of unexpected moves |
| Market Participants | Full participation (banks, institutions, retail) | Limited participation (mostly retail, few institutions) | Prices more susceptible to small orders |
| Execution Quality | Good (fast fills, low slippage) | Poor (slow fills, high slippage, re-quotes) | Risk of unfavourable execution |
| Gap Risk | Low (except after weekends) | High (especially after long weekends) | Positions can open at significantly different prices |
| Data Releases | Normal schedule, clear market response | Possible delays, muted or exaggerated response | Unpredictable trading outcomes |
| Margin Requirements | Standard (as per broker policy) | May be increased by some brokers | Higher capital requirement for open positions |
Note: These are general observations. Actual conditions may vary depending on the specific holiday, the broker, and prevailing market sentiment.
Use this practical checklist to prepare for forex market holidays and reduce your exposure to unnecessary risk.
Many novice traders believe the forex market shuts down on public holidays. In reality, it remains open for electronic trading, but liquidity is severely reduced. This misconception can lead to a false sense of security or, conversely, to missed opportunities.
Using standard position sizes on a holiday ignores the fact that spreads are wider and slippage is more likely. The effective cost of each trade is higher, and the risk-reward ratio deteriorates accordingly.
Leaving positions open over a long holiday weekend—especially over Christmas or New Year—exposes traders to the risk of significant price gaps when the market reopens. This risk is often underestimated until it materialises.
Brokers have different policies for holiday trading. Some may increase spreads, others may reduce leverage, and some may limit the availability of certain instruments. Always check your specific broker's policy rather than relying on general assumptions.
During holidays, liquidity is already thin for major pairs, and it can be almost non-existent for exotic or minor pairs. Trading these pairs on a holiday is a high-risk activity with very poor execution quality.
A holiday in one country can affect related currency pairs even if your own region is not celebrating. For example, a US holiday will impact USD pairs, which may affect traders worldwide. A global awareness of holidays is essential.
Stop-loss levels set during normal market conditions may be too tight for holiday trading. Widening stop-losses is a necessary adjustment, but many traders fail to make it.
The Financial Industry Regulatory Authority (FINRA) has cautioned investors about the risks of trading during periods of low liquidity, noting that price discovery can be impaired and that execution quality often declines. These warnings are particularly relevant for forex traders on market holidays.
Trading during forex market holidays carries significantly higher risk than trading on normal days. Reduced liquidity, wider spreads, increased slippage, and the possibility of price gaps can all lead to unexpected losses. Traders who are not prepared for these conditions may suffer losses that exceed their expectations.
The Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) have both issued warnings about the risks of trading in thin markets. They advise retail traders to be particularly cautious during holidays and to ensure they fully understand the risks before placing trades.
This guide is for educational purposes only. It does not constitute financial, legal, or tax advice. All information is provided "as is" and may not reflect current market conditions, regulatory requirements, or specific broker policies. You should verify all details with the relevant authority or your broker directly before making any trading decision.
The Federal Reserve, Bank of England, and European Central Bank publish official holiday schedules that can be used as reference points. However, exact trading conditions may vary by broker, and you should always consult your broker's specific holiday policy.
Past performance is not indicative of future results. The examples and scenarios in this guide are for illustration only and do not guarantee any particular outcome. Always consult a qualified financial advisor before making investment decisions.