Fri. Apr 16th, 2021

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How Fixed Income Securities Affect Currency Movements?

1 min read

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.




United States

U.S. Treasury bonds, Yankee bonds

United Kingdom

Gilts, Bulldog Bonds


Japanese Bonds, Samurai bonds


Eurozone Bonds, Euribors




Swiss Bonds


Canadian Bonds


Australian Bonds, Kangaroo bonds, Matilda Bonds

New Zealand

New Zealand Bonds, Kiwi Bonds


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.

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