Hello,
It’s my first question here and it’s probably a silly one but I still hope that someone will help me…
I’ve been reading about bonds and I feel that the more I read the less I understand…
Quote from the school of pipsology:
„Let’s look at one scenario: Demand for bonds usually increases when investors are concerned about the safety of their stock investments. This flight to safety drives bond prices higher and, by virtue of their inverse relationship, pushes bond yields down.
As more and more investors move away from stocks and other high-risk investments, increased demand for “less-risky instruments” such as U.S. bonds and the safe-haven U.S. dollar pushes their prices higher.”
In this case bond yields go down and it should be taken as positive for the USD.
Another quote:
„Another reason to be aware of government bond yields is that they act as indicator of the overall direction of the country’s interest rates and expectations.
For example, in the U.S., you would focus on the 10-year Treasury note. A rising yield is dollar bullish. A falling yield is dollar bearish.”
In this case if bond yields go up, it should be taken as positive for the USD.
My theory: Roughly speaking, there are two situations where bond yields (and bond prices) could change. First is when there are some expectations that inflation (and consequently interest rates) could change. In this scenario increase in bond yields is a sign that inflation and interest are likely to go higher which is good for the USD. Second is when investors are seeking some safe-havens instruments like bonds or USD due to increasing risk aversion. In this case bigger demand for bonds makes their prices higher and, consequently, their yields lower – this time lower yields are positive for the USD.
Conclusion: If bond yields go down because of risk aversion and the fact that investors are seeking for some safe investments, it’s likely that the USD goes up (as USD is also considered to be a safe-haven). If bond yield go down due to some other reasons, it’s rather a negative indication for the USD. So the most important thing is to determine why bond yields have changed…
I’d really appreciate if someone more experienced could verify that…
And I do know that my grammar leaves a lot to be desired 
Regards,