Web Trader MT5
Daily cut-off is the hour in the trading day beyond which trading operations are carried on as the trading of the following business day, and not the present day. In foreign exchange, this is generally 5:00 p.m. New York time, which is also the technical end and beginning of the FX trading day – the point at which the overnight swap rates are applied to those positions held open .
In banking more generally, the daily cut-off determines which payments, transfers, and settlements are processed the same day and which are rolled over to the next working day. Missing the cut-off puts the transaction on hold, which can be critical in time-sensitive corporate treasury operations or in trades where it is essential to know the transaction’s finalization date.
The cut-off time may differ across institutions and even across currencies. The interactions between them add complexity to cross-border transactions.
Example: A corporate treasurer in London orders a large payment in USD at 5:15 p. m. New York time, which assumes that it will settle the same day. It does not; the cut-off time passed at the end of the day, the transaction is being held until the next working day, and a supplier in New York does not receive money as they would have done otherwise.
In a transaction where the time of payment was part of the contract terms, there are effects of the missed cut-off.
