The relationship between US Bond yields and the US Dollar is one of direct correlation. When market risk tolerance increases, higher US bond yields will become a factor in driving demand for the USD. For some investors, rising bond yields can be an opportunity to sell the US dollar, should US Bonds become less creditworthy simultaneously. In this scenario, bonds are seen as a less secure investment and pose a higher risk of default, meaning the outlook for the US economy is less optimistic than previously thought.