May be I was confused with bond - yield understanding. I have checked my notes again (copied below). In summary, yields are to go higher soon which will strengthen GBP and Euro further? It would be helpful if someone can explain the current yield - bond relationship with the help of some charts. Thanks
Yields go down when bond traded value goes up, yield up when bond down
us yields up, bonds are down, money flows out of US bonds, would be bearish dollar and bullish cable/fiber
-- "If yields are dropping and one of the 3 yields fails to make a lower low, look for US$ to bounce (vice versa)"
US yields drop and one fails to lower low, the one failing could signal reversal for all 3, therefore could expect yields to reverse up and, see above, USD down
-- "As yields are increasing that is bullish for foreign currencies, as they drop it is bearish for foreign currencies"
yes
-- "Risk is on when yields are going up and risk is off wen yields are declining because foreign currencies chase yield"
yes US yields up is bond down, dollar out of bonds, flows into shares and foreign currency, risk on. selling dollar and buying foreign currency takes the pair up (cable, fiber). Risk off is reverse scenario, money buys usd, dollar up pairs down
-- "Yields dropping is a risk off scenario, meaning we are looking for sells until we see a divergence in the yields"
yes, yields down is risk off
-- "The US$ should be rallying as yields drop"
yield drop is bond up, usually usdx up
to recap, normally:
yield up is bond down, dollar down, risk on, shares up, pairs up
yield down is bond up, dollar up, risk off, shares down, pairs down.