Different currencies listen to different parts of the yield curve
US government bond yields move currencies, but which bond you should watch depends on which currency you trade.
If the US 2-year yield rises by a quarter point, USD/CHF has typically risen about 0.44 %. A quarter point on the 30-year moves it about 0.34 % — and far less reliably, which is the bigger difference.
How to use this
- Trading USD/CHF, USD/JPY, EUR/USD or GBP/USD: watch the US 2-year yield. It tracks what the Federal Reserve is expected to do, which is what moves these.
- Trading AUD/USD or NZD/USD: watch the 10-year instead. These are growth currencies and the 10-year carries more growth expectation.
- A hot US inflation print pushes short yields up, which usually lifts the dollar against the low-yielders first.
- Half the pairs do not follow either pattern cleanly, so use this to know which number to have on screen, not as a rule to trade mechanically.
The detail
It is tempting to treat “US yields” as one thing. The data says otherwise, and not in the tidy way we first assumed.
For the franc, the yen, the euro and sterling, sensitivity falls steadily as you move out along the curve. USD/CHF correlates 0.250 with the 2-year, 0.216 with the 10-year and 0.153 with the 30-year. USD/JPY, EUR/USD, GBP/USD and CAD/CHF all show the same ordering.
The Australian and New Zealand dollars break it. Both peak at the 10-year rather than the 2-year, as does NZD/CAD. Across all 28 pairs only half decay monotonically, so this is a tendency among a particular group, not a law.
The split is informative rather than inconvenient. The 2-year is dominated by expectations for central bank policy — the interest rate differential that drives carry, which is what matters for the low-yielding funding currencies. The 10-year carries more growth and inflation expectation, and the commodity dollars are growth currencies. Each responds most to the maturity that prices its own driver.
The practical version: watch the 2-year for the funding currencies, and the 10-year if you trade the Aussie or the Kiwi.
Where each pair peaks along the curve
the numbers behind it RECOMPUTED 03 Sep 2026| Pair | 2-year | 10-year | 30-year |
|---|---|---|---|
| USDCHF | +0.252 | +0.216 | +0.153 |
| USDJPY | +0.201 | +0.196 | +0.153 |
| EURUSD | -0.196 | -0.154 | -0.093 |
| CADCHF | +0.185 | +0.150 | +0.111 |
| NZDUSD | -0.171 | -0.173 | -0.138 |
| GBPUSD | -0.160 | -0.150 | -0.102 |
| AUDUSD | -0.144 | -0.162 | -0.137 |
| NZDCAD | -0.141 | -0.147 | -0.128 |