Intermarket Correlations
Learn how bonds, commodities, and equities relate to forex.
Last reviewed: 2026-03-06
Article content
Overview
Forex does not trade in isolation. Bonds (especially government yields) influence currency via interest rate expectations. Commodities (gold, oil) affect commodity currencies like AUD and CAD. Equities can signal risk appetite.
Bonds Forex
Bond yields drive forex. Rising Treasury yields typically strengthen USD. Falling yields weaken it. The yield differential between countries (e.g. US vs Germany) drives EUR/USD. Watch 10Y yields for rate expectations.
Commodities Forex
Gold often moves inverse to USD. Oil affects CAD (Canada exports oil). Commodity currencies (AUD, CAD, NZD) rise when commodity prices rise. Use gold and oil as confirmation for USD and commodity FX.
Equities Forex
Equities signal risk sentiment. Risk-on (stocks up) favors AUD, CAD, NZD. Risk-off (stocks down) favors JPY, CHF. S&P 500 and VIX are key indicators. Equities often lead forex.
Practical Application
Combine all three. If bonds (yields up), commodities (gold down), and equities (stocks up) all point to USD strength, conviction increases. Divergences can signal reversals.
Knowledge check
1 of 3How do bond yields affect forex?
FAQ
Common questions about this topic.
How do bonds affect forex?
Rising bond yields attract capital and strengthen the currency. Falling yields weaken it. Treasury yields drive USD expectations.
How do commodities affect forex?
Gold moves inverse to USD. Oil affects CAD. Commodity currencies (AUD, CAD, NZD) rise when commodity prices rise.
How do equities affect forex?
Risk-on (stocks up) favors commodity currencies. Risk-off (stocks down) favors JPY and CHF. Equities often lead forex.
Why use intermarket analysis?
To confirm trends and avoid fighting the market. When bonds, commodities, and equities align, conviction in a forex trade increases.
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Disclaimer and sources
Educational content only. Not financial advice.
Important disclaimer
Forex trading involves substantial risk of loss. This content is for educational purposes only and is not financial advice.