Reserve Requirements and Bonds
Why the opposite scenario holds for currency pairs can be related to funding requirements. Suppose a government passes a budget. Outside of tax revenues, budgets are financed by the sale of bonds. Because the budget is a known figure, bonds will be sold to equal the number. This ties the particular nation's currency into the budget figure. The currency now rises and falls based on revenue earned or lost from bond sales and the direction it takes in the marketplace. Past issuance means nothing unless large redemptions occur in short time frames.
A home currency can't always be tied to yield because yield can't be a guarantee since it is costly and risky due to the many unknown market and economic variables. Now suppose ...
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