This lesson is part of the ShaFX Academy structured learning system. Educational only — no profit promises, no signal services, no financial advice.
The four-quadrant frame
Most macro regimes can be loosely described by two axes: growth (rising or falling) and inflation (rising or falling). Each quadrant favours different currencies, commodities and equity factors. FX is not driven by interest rates alone — it is driven by relative rates and growth.
Real yields and the dollar
The US dollar tends to strengthen when US real yields rise faster than peers and when global liquidity tightens. The opposite move — falling real yields and easing liquidity — typically benefits risk currencies and commodities.
How to use this
Don't trade off the regime — frame your trades inside it. If the regime favours dollar strength, prefer setups that align with USD bid; deprioritise counter-trend bets unless local catalysts justify them.