The working day of currency dealers on Forex
The working day of currency dealers of Western commercial banks usually starts at 7:30 am local time. At 8-00 in the morning dealers are already actively signing deals. Morning half an hour is usually devoted to a brief analysis of the events that took place on the world currency markets by the time the work began. Dealers and senior dealers use economic and technical analysis of the market, read analytical articles in the press, exchange views, as well as fresh rumors with each other and with dealers from other commercial banks.
On the basis of various data, a picture of the possible behavior of the exchange rate for the upcoming day with different variants of the probability of certain events is gradually emerging.
By 8 o’clock in the morning the market consisting of individual dealers, develops tactics of behavior as a whole and starts to be included in operations of the world »currency market, giving a new energetic impulse to the movement of the exchange rate.
Different territorial markets can be given the following characteristics of the average typical activity during the day.
Here, the most active transaction market conversion transactions dollar to the Japanese yen, the dollar to a mark, the yen and the dollar against the Australian dollar, but in general, exchange rate movements are rather insignificant (20-50 pips).
At 9:00 on the market opens in the European financial centers of the mainland – Zurich, Frankfurt am Main, Paris, Luxembourg. However, for the present, the strong movement of the dollar exchange rate to major currencies (in particular, to the German mark) begins after 10 when the London market opens. This continues, usually within two or three hours, after which the dealers of European banks go to lunch – lunch, and market activity slightly decreases. Exchange rate fluctuations can be between 10-15 pips (dealers call is dead or dull market – dead or boring market), but can sometimes reach 70 – 100 pips (.. Big ie figures), which is characterized as lively or busy market (bouant or busy market).
The situation is reviving again with the opening of the market in New York at 8-00 when the dealers of American banks start their morning work, and European dealers are also returning from lunch. The strengths of European and American banks are approximately equal, so the fluctuations of the rate on average do not go beyond the limits of the usual European fluctuations. Nevertheless, currency dealers are eagerly awaiting the opening of the New York market to get fresh data on the possible movement of the exchange rate (especially if the European market was sluggish). However, after the closure of the European market (about 9-10 hours), aggressive American banks, remaining alone in the “thin” market, can lead to a sharp change in the exchange rate of the dollar to the German mark, yen, pound sterling, etc. At this time, the most dramatic movements of exchange rates – up to 400 – 500 pips (USD / DEM), which corresponds to several percent of the change in their value.