The London Close Can Distort a Normal FX Spread

A forex spread that looks normal during the London–New York overlap can become a poor benchmark near a session transition. Daily cutoffs, benchmark orders and reduced dealer participation change the mix of flow, so a strategy should measure costs in the exact window in which it trades.

The Bank of England's April 2026 survey recorded $4.609 trillion in average daily FX turnover in London. FX swaps accounted for $2.172 trillion, spot for $1.253 trillion and options for $309 billion. The numbers confirm London's central role, but they are daily averages across instruments and participants. They do not say that liquidity is uniform throughout the day.

Session timing matters because London overlaps with Asia early and New York later. The overlap with New York often brings more active two-way participation in major pairs. Near a cutoff, however, hedging, benchmark rebalancing and the withdrawal of some liquidity providers can make the top quote less representative of normal conditions.

Measure the session, not the slogan

Window	Typical market question	Useful measurement
Asia hours	Is the pair locally active？	Median spread and depth
London open	Are overnight positions repricing？	First 15-minute execution cost
London–New York overlap	Is two-way flow strongest？	Spread plus realized slippage
London close/cutoff	Are benchmark flows dominant？	Quote stability and order size

“Best time to trade” articles often reduce this structure to one clock range. The better test uses the trader's own order records over several weeks. A pair linked to Europe may behave differently from AUD/NZD or an emerging-market cross. Daylight-saving changes also shift the local-clock overlap for traders outside Europe and North America.

Link the structural data to today's market

The September calendar adds event risk to normal session effects. The ECB decision, U.S. inflation reports and the following week's Fed and BOJ meetings can concentrate orders around specific times. If a spread widens at a cutoff on the same day as a major release, the cause may be combined rather than purely seasonal.

That closes the argument: London's record size explains why it is a key centre, while intraday measurement explains why the daily average cannot be used as a guaranteed spread.

This September FX market outlook offers a current macro overlay. It does not measure London intraday spreads; the turnover figures come from the Bank of England.