Yield

Yield in finance refers to the income earned on an investment, most commonly expressed as the annual interest rate paid by a government bond or fixed-income instrument. In forex trading, bond yields — particularly those of U.S. Treasury bonds — are closely monitored because they reflect interest rate expectations and economic outlook. Higher yields in a country typically attract foreign capital, increasing demand for that nation's currency. The yield differential between two countries is a major driver of currency pair movements and forms the basis of carry trade strategies where traders profit from interest rate disparities between economies.