How do bond yields affect forex?

Higher yields attract foreign capital, and buying a country's bonds requires buying its currency. Rising relative yields therefore tend to strengthen a currency, while falling relative yields weaken it.

Which bond yield matters most for currencies?

The 2-year, because it most closely reflects expected central bank policy over the trading horizon. The 10-year matters more for longer-term valuation and risk sentiment.

What is a bond yield spread?

The difference between the yields of two countries at the same maturity — for example the US 2-year minus the German 2-year. That spread is one of the tightest fundamental relationships to EUR/USD.

Why do yields rise when bond prices fall?

A bond pays a fixed coupon. If its price falls, that fixed payment represents a higher return on the lower price, so the yield rises. Price and yield always move inversely.

FX TERMINAL

Government Bond Yields & Spreads

Bond yields drive currencies. Monitor live government bond yields across the major economies, compare maturities, and watch cross-country yield spreads — the interest rate differentials that underpin trends in USD/JPY, EUR/USD and every other major pair.

Benchmark 10-year government bond yields

As of 27 August 2026, the highest benchmark 10-year government bond yield among the major economies tracked by FX Terminal was Australia at 5.08%, and the lowest was Switzerland at 0.37%. Yield differentials of this kind are a primary driver of currency pairs.

Benchmark 10-year government bond yields — as of 27 August 2026 (percent per annum)
Country	Tenor	Yield	Day change
Australia	10Y	5.08%	+3 bps
United Kingdom	10Y	5.03%	-1 bps
New Zealand	10Y	4.75%	+4 bps
United States	10Y	4.66%	+1 bps
France	10Y	4.10%	+1 bps
Italy	10Y	4.08%	+1 bps
Spain	10Y	3.71%	+1 bps
Canada	10Y	3.67%	+2 bps
Germany	10Y	3.25%	+2 bps
Japan	10Y	2.89%	+1 bps
China	10Y	1.70%	+1 bps
Switzerland	10Y	0.37%	+0 bps

Source: FX Terminal bond yield tracker. Data as of 27 August 2026. This is a static snapshot taken when the page was published — open the terminal above for the live, interactive version.

The rate story behind every FX trend

Bond yields lead currencies. This screen tracks live government bond yields across the major economies — US Treasuries, German Bunds, UK Gilts, JGBs and the rest — across maturities, with the cross-country spreads that drive exchange rates.

The 2-year yield is the market's cleanest read on where policy is headed, which is why the 2-year spread between two countries so often tracks their currency pair. The 10-year captures growth and inflation expectations and matters more for longer-horizon positioning.

Reading spreads and the curve

A widening yield spread in a currency's favour tends to pull the exchange rate with it; a narrowing one removes support even if price has not yet noticed. Divergences between the spread and the pair are worth watching, because the currency usually catches up to the bond market rather than the other way round.

Curve shape adds a second layer. An inverting curve signals the market expects growth to slow and cuts to follow, which typically weighs on a currency once the easing is actually priced.

Frequently asked questions

How do bond yields affect forex?: Higher yields attract foreign capital, and buying a country's bonds requires buying its currency. Rising relative yields therefore tend to strengthen a currency, while falling relative yields weaken it.
Which bond yield matters most for currencies?: The 2-year, because it most closely reflects expected central bank policy over the trading horizon. The 10-year matters more for longer-term valuation and risk sentiment.
What is a bond yield spread?: The difference between the yields of two countries at the same maturity — for example the US 2-year minus the German 2-year. That spread is one of the tightest fundamental relationships to EUR/USD.
Why do yields rise when bond prices fall?: A bond pays a fixed coupon. If its price falls, that fixed payment represents a higher return on the lower price, so the yield rises. Price and yield always move inversely.

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Data sources

FX Terminal provides free market research and analysis for informational purposes only. Nothing here is investment advice or a recommendation to trade. Trading forex carries a high level of risk.