Standard Chartered strategists say a 30-year pattern shows the most supportive backdrop for risk-sensitive currencies is a simultaneous rise in US equities and US Treasury yields. They note yields are often low early in recoveries—reflecting policy easing and weak credit demand—but as growth optimism builds, equities, bond yields and risk-linked currencies such as CAD, AUD, NOK, MXN and NZD typically strengthen. They caution that if yield rises instead reflect a higher term premium or rising inf

Standard Chartered strategists say a 30-year pattern shows the most supportive backdrop for risk-sensitive currencies is a simultaneous rise in US equities and US Treasury yields. They note yields are often low early in recoveries—reflecting policy easing and weak credit demand—but as growth optimism builds, equities, bond yields and risk-linked currencies such as CAD, AUD, NOK, MXN and NZD typically strengthen. They caution that if yield rises instead reflect a higher term premium or rising inflation risk, the correlation may not hold.