How capital flows relate to currencies and bond yields

To buy US assets, a foreign investor usually needs dollars, so strong inflows tend to coincide with demand for the currency. Large outflows can have the opposite effect.

Foreign demand for government bonds can also hold down yields, since more buyers means the government pays less to borrow. When big holders sell, yields can rise.

These are tendencies, not rules. Exchange rates and yields respond to interest rates, growth and risk appetite at the same time, and flows are often a symptom of those forces rather than the cause.

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