UK bank holiday Mondays while New York is open

[Fairman]

UK bank holiday Mondays while New York is open

A few times a year London is closed on a Monday while the US is trading normally. Early May, late May and late August are the usual ones. The effect on FX is bigger than people expect, because London is the biggest FX centre by a long way.

What changes: the European morning is thin. Frankfurt and Paris may be open, but without London, liquidity in GBP pairs especially is reduced. Spreads widen, moves are choppier, and the usual London open behaviour doesn't happen. Then New York opens and the day suddenly has more participants, but still less than a normal day.

For GBP pairs I mostly sit out the morning. The setups I trade rely on London activity, and without it they don't behave the same. EURUSD is a bit better because Europe is still partly there, but I'd still expect smaller ranges.

The flip side is US data on these days. If the US releases something important while London is shut, the reaction can be bigger than normal because there's less liquidity to absorb it. That's worth knowing whether you trade it or not.

I keep a list of UK and US bank holidays at the start of each year so I'm not surprised on the day.

[Fairman]

Same idea in reverse for US holidays when London is open, like Thanksgiving or Independence Day. London trades as normal in the morning, then the afternoon goes very quiet because New York isn't there. Spreads widen into the late London session and the usual US-driven moves don't happen. Some people use those afternoons to stop early and do review work. Either way, I'd expect the second half of the day to be thin and plan accordingly. Thanksgiving Friday is a funny one too, with the US technically open but most desks running light. It often feels more like a holiday than a trading day.

[Fairman]

Brokers sometimes change trading hours for specific instruments on bank holidays, especially index CFDs. FTSE might close early or not trade, while forex runs as normal. If you trade indices alongside FX, check the broker's holiday schedule. It's also a common time for brokers to do maintenance, which can mean short outages. They usually announce it, but those emails are easy to miss. A quick look at the broker's notices page before the session saves surprises. A short outage on a thin holiday morning isn't a big deal if you're flat, and much more annoying if you're holding something with a tight stop.

[FXS Prop Desk]

London closed with New York open is a strange mix. EURUSD and GBPUSD often trade in a narrow range all morning, then pick up when New York arrives, but with less liquidity than normal.

The day can catch traders who only look at the US calendar. Spreads on GBP pairs in particular can stay wider than usual. Checking the UK holiday calendar at the start of each month avoids a surprise.

[Fairman]

Gold and the indices can behave oddly on UK bank holidays. If you trade XAUUSD or the FTSE CFD, check whether your broker changes the hours or spreads. Gold often has thinner liquidity in the European morning without London, which can make early moves less reliable. The New York open might then bring the first real liquidity of the day. I'd treat the morning as a pre-session and wait for New York before taking anything that relies on London type behaviour, like the London breakout. It's a slower day, but often a cleaner one in the afternoon.

[Fairman]

The day after a UK bank holiday can be busier than normal. London traders come back with a day of news and moves to catch up on, and that can mean a strong move at the open on Tuesday. If New York made a big move on the Monday, London might extend it or reverse it. I've found it useful to note what happened during the holiday and be ready for a more active Tuesday open than usual. Planning for it ahead is better than being surprised. Even a quick note on Monday evening helps with that.