How Fixed Income Securities Affect Currency Movements?

Fixed-income trading is that the process of trading fixed-income securities over-the-counter (OTC). The fixed-income market offers low transaction costs, a competitive market structure, and an outsized, diverse collection of market participants. The fixed-income stock exchange is dominated by institutional investors.

As the bond spread or rate of interest differential between two economies increases, the currency with the upper bond yield or rate of interest generally appreciates against the opposite.

• Fixed income securities (including bonds) are investments that provide a hard and fast payment at regular time intervals.
• Economies that provide higher returns on their fixed income securities should attract more investments.

This would then make their local currency more attractive than those of other economies offering lower returns on their fixed income market.

Most countries offer bonds but you would possibly want to stay to those whose currencies are a part of the majors.

 

ECONOMY	BONDS OFFERED
United States	U.S. Treasury bonds, Yankee bonds
United Kingdom	Gilts, Bulldog Bonds
Japan	Japanese Bonds, Samurai bonds
Eurozone	Eurozone Bonds, Euribors
Germany	Bunds
Switzerland	Swiss Bonds
Canada	Canadian Bonds
Australia	Australian Bonds, Kangaroo bonds, Matilda Bonds
New Zealand	New Zealand Bonds, Kiwi Bonds
Spain	Matador Bonds

Some countries also offer bonds with varying terms to maturity so just confirm you’re comparing bonds with an equivalent term to maturity.