Bond spreads have a profound influence in the forex market. This is in tandem with many of the correlations we see between currencies and other markets such as the stock markets and the commodity markets. In this article, we will show the correlation between forex and bond spreads.
Best Forex Brokers UK
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Our picks at a glance
- 1 Pepperstone Top score: Platforms 4.8 Info Visit Pepperstone
- 2 XTB Top score: Trust 4.8 Info Visit XTB
- 3 Interactive Brokers Top score: Trust 4.6 Info Visit Interactive Brokers
- 4 Vantage FX Top score: Trust 4.7 Info Visit Vantage FX
- 5 IG Top score: Fees 4.5 Info Visit IG
- 6 Forex.com Top score: Research 4.3 Info Visit Forex.com
- 7 Eightcap Top score: Mobile 4.6 Info Visit Eightcap
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Our top pick
Pepperstone provides forex spreads on the EUR/USD averaging just 0.12 pips with their Razor account. This is highly competitive. Their extensive portfolio includes over 100 currency pairs, which exceeds what most rivals offer. Furthermore, Pepperstone stands out by offering three unique currency indices: USDX, EURX, and JPYX, which are rare on other platforms. They have been recognised with our 'Best Forex Broker' award twice.
- GBPUSD Spread
- 0.4
- EURUSD Spread
- 0.1
- GBPEUR Spread
- 0.4
- Total Assets
- 100+
- FCA Regulated
- Platforms
- Pepperstone Trading Platform, MT4, MT5, cTrader, TradingView
CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. 73-89% of retail investor accounts lose money when trading CFDs.
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XTB offers access to over 70 currency pairs, with competitive spreads averaging about 1 pip for major pairs. Its xStation platform is user-friendly, providing traders with top-tier charting tools, over 30 indicators, and diverse order types to support different strategies and risk management needs.
- GBPUSD Spread
- 1.4
- EURUSD Spread
- 1.0
- GBPEUR Spread
- 1.4
- Total Assets
- 70+
- FCA Regulated
- Platforms
- xStation
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money
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IBKR offers a wide selection of more than 100 forex pairs, including major, minor, and exotic options, exceeding most competitors except CMC Markets. Trading takes place across various platforms with institutional-quality spreads from 0.1 pips. It supports over 100 advanced order types like brackets, scale, and OCA orders.
- GBPUSD Spread
- 0.2
- EURUSD Spread
- 0.1
- GBPEUR Spread
- 0.3
- Total Assets
- 100+
- FCA Regulated
- Platforms
- Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower
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Vantage offers over 55 currency pairs, exceeding industry standards, allowing seasoned traders numerous opportunities. Its extensive liquidity pool ensures forex spreads start at 0.0 pips in ECN accounts, with a competitive round-trip commission usually set at $6.00 per standard lot. Additionally, there are no deposit fees or concealed charges.
- GBPUSD Spread
- 0.5
- EURUSD Spread
- 0.18
- GBPEUR Spread
- 0.5
- Total Assets
- 55+
- FCA Regulated
- Platforms
- ProTrader, MT4, MT5, TradingView, TradingCentral, DupliTrade
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IG provides an extensive selection of over 80 currency pairs through its own web platform, mobile app, or MetaTrader 4. For advanced charting and forex analysis, the ProRealTime software is available. Testing shows forex spreads are competitive, beginning at 0.1 pips on major pairs such as EUR/USD.
- GBPUSD Spread
- 0.9
- EURUSD Spread
- 0.86
- GBPEUR Spread
- 0.9
- Total Assets
- 80+
- FCA Regulated
- Platforms
- Web, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral, ProRealTime
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
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FOREX.com remains a leading FX broker, providing 80 currency pairs with highly competitive fees. EUR/USD spreads can reach as low as 0.0, with a $7 commission per $100k, making it a standout choice.
- GBPUSD Spread
- 1.3
- EURUSD Spread
- 1.2
- GBPEUR Spread
- 1.4
- Total Assets
- 84
- FCA Regulated
- Platforms
- WebTrader, Mobile, MT4, MT5, TradingView
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Eightcap provides over 50 currency pairs, matching the industry norm but falling short of leaders like CMC Markets, which offers more than 300. Nonetheless, Eightcap distinguishes itself with institutional-quality spreads starting from 0.0 pips on major pairs such as EUR/USD. The broker's competitively low commissions at $3.50 per side further enhance its appeal. Eightcap also equips traders with comprehensive forex data, including essential fundamentals, bullish and bearish signals, and a calendar monitoring significant foreign exchange market events.
- GBPUSD Spread
- 0.1
- EURUSD Spread
- 0.0
- GBPEUR Spread
- 0.1
- Total Assets
- 50+
- FCA Regulated
- Platforms
- MT4, MT5, TradingView, TradeLocker
Services are provided subject to applicable laws and regulations. Certain products, services, instruments, platforms or payment methods may not be available to residents of certain jurisdictions.
Compare
Safety Comparison
Compare how safe the Trading Forex With Bond Spreads are and what features they offer to protect traders.
| Broker | Trust Rating | FCA Regulated | Negative Balance Protection | Guaranteed Stop Loss | Segregated Accounts |
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4.6 | ||||
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4.6 | ||||
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4.7 | ||||
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4.6 | ||||
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4.4 | ||||
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4.5 | ||||
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4.3 |
Payments Comparison
Compare which popular payment methods the Trading Forex With Bond Spreads support and whether they have trading accounts denominated in British Pounds (GBP).
| Broker | GBP Account | Debit Card | Credit Card | Neteller | Skrill | Apple Pay |
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Mobile Trading Comparison
How good are the Trading Forex With Bond Spreads at mobile trading using apps or other mobile interfaces.
| Broker | Mobile Apps | iOS Rating | Android Rating | Smart Watch App |
|---|---|---|---|---|
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iOS & Android | 4.4 | 4.1 | |
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iOS & Android | 4.7 | 4.1 | |
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iOS & Android | 4.3 | 4.5 | |
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iOS & Android | 3.6 | 3.9 | |
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iOS & Android | 4.6 | 4.0 | |
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iOS & Android | 3.6 | 3.8 | |
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iOS & Android | 4.8 | 4.4 |
Beginners Comparison
Are the Trading Forex With Bond Spreads good for beginner traders, that might want an affordable setup to get started, along with good support and educational resources?
| Broker | Demo Account | Minimum Deposit | Minimum Trade | Support Rating | Education Rating |
|---|---|---|---|---|---|
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$0 | 0.01 Lots | 4.6 | 4.0 | |
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$0 | 0.01 Lots | 4.3 | 3.8 | |
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$0 | $1 | 3.0 | 4.3 | |
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$50 | 0.01 Lots | 4.4 | 4.0 | |
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$0 | 0.01 Lots | 4.5 | 4.8 | |
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$100 | 0.01 Lots | 3.9 | 3.9 | |
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£100 | 0.01 Lots | 4.0 | 3.5 |
Advanced Trading Comparison
Do the Trading Forex With Bond Spreads offer features that allow for more advanced trading strategies?
| Broker | Automated Trading | Pro Account | Leverage | VPS | AI | Low Latency | Extended Hours |
|---|---|---|---|---|---|---|---|
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Expert Advisors (EAs) on MetaTrader, cBots on cTrader | 1:30 (Retail - UK, EU, Australia), 1:500 (Pro), 1:200 (Offshore), 1:400 (Kenya) | |||||
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TWS API | 1:30 | |||||
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Myfxbook AutoTrade, Expert Advisors (EAs) on MetaTrader | 1:30 | |||||
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Expert Advisors (EAs) on MetaTrader, build your own on ProRealTime | 1:30 (Retail), 1:222 (Pro) | |||||
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Expert Advisors (EAs) on MetaTrader | 1:30 | |||||
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TradingView Bots | 1:30 |
Detailed Rating Comparison
Use this heatmap to compare our detailed ratings for all of the Trading Forex With Bond Spreads.
| Broker | Trust | Platforms | Mobile | Assets | Fees | Accounts | Support | Research | Education |
|---|---|---|---|---|---|---|---|---|---|
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4.6 | 4.8 | 4.3 | 4.6 | 4.5 | 4.0 | 4.6 | 4.3 | 4.0 |
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4.6 | 4.0 | 4.4 | 4.6 | 3.9 | 4.0 | 4.3 | 4.1 | 3.8 |
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4.7 | 3.9 | 4.4 | 4.7 | 4.3 | 3.9 | 3.0 | 4.7 | 4.3 |
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4.6 | 4.3 | 3.8 | 4.5 | 4.4 | 4.5 | 4.4 | 4.0 | 4.0 |
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4.4 | 4.8 | 4.3 | 4.5 | 5.0 | 4.0 | 4.5 | 4.9 | 4.8 |
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4.5 | 4.6 | 3.7 | 4.0 | 4.2 | 4.0 | 3.9 | 4.8 | 3.9 |
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4.3 | 4.3 | 4.6 | 3.6 | 3.8 | 4.0 | 4.0 | 3.5 | 3.5 |
Our Take On Pepperstone
Pepperstone excels in trading with tight spreads, swift execution, and advanced charting for seasoned traders. Beginners enjoy zero minimum deposit, comprehensive educational materials, and outstanding 24/5 support, including 18-hour weekend assistance.
Tobias Robinson Reviewer
Pros
- Support for top-tier charting platforms such as MT4, MT5, TradingView, and cTrader. These tools accommodate different short-term trading methods, including algorithmic trading.
- Pepperstone offers pre-IPO perpetual futures, adding Anthropic in October 2026, enabling 24/7 speculation on expected share prices through cash-settled CFDs.
- In recent years, Pepperstone has significantly enhanced the deposit and withdrawal process. By 2025, clients can use Apple Pay and Google Pay, while 2024 saw the introduction of PIX and SPEI for customers in Brazil and Mexico.
Cons
- Overnight holding fees exceed those of some Market Maker brokers (typically Benchmark + 2.5%). Pepperstone suits traders and forex scalpers well but is less ideal for swing traders who keep positions open overnight.
- Execution might not appear as dependable in rapid markets as headline speeds imply. Our tests showed swift execution at targeted prices. However, community feedback highlights concerns over slippage, stop-loss fills, and order triggers sensitive to spreads amid volatility.
- Although the market range has expanded, crypto CFD options remain somewhat restricted, especially when compared to specialised brokers like Eightcap. Additionally, there is no facility to invest in actual cryptocurrencies.
73-89% of retail investor accounts lose money when trading CFDs
Our Take On XTB
XTB excels for novice traders with its superb xStation platform, minimal trading costs, no required deposit, and outstanding educational resources, many of which are fully integrated into the platform.
William Berg Reviewer
Pros
- In 2026, XTB expanded its asset offerings and markets. It introduced options trading in Spain and Germany, launched spot cryptocurrencies in select regions, and unveiled Investment Plans 2.0. These enhanced plans now feature more pre-built options, including sectors like Defence, a user-friendly interface, and increased flexibility to mix stocks and ETFs within individual plans.
- The xStation platform stands out with its user-friendly design and intuitive tools, such as adaptable news feeds, sentiment heatmaps, and a trader calculator. These features streamline the learning process for new traders.
- XTB offers a superb array of educational resources, such as training videos and articles, embedded within the platform to assist traders of all experience levels.
Cons
- XTB lacks a raw spread account, a feature increasingly offered by competitors such as Pepperstone. This omission might not satisfy traders seeking the most competitive spreads.
- The demo account lasts only four weeks, posing a challenge for traders wanting to fully explore the xStation platform and refine short-term strategies before investing actual money.
- XTB has stopped supporting MT4, restricting traders to its own platform, xStation. This decision may discourage experienced traders accustomed to using the MetaTrader suite.
74% of accounts lose money when trading CFDs with this provider.
Our Take On Interactive Brokers
Interactive Brokers ranks highly for seasoned traders due to its robust charting platforms, live data, and bespoke layouts via the new IBKR Desktop app. Its competitive pricing and sophisticated order choices appeal to traders, and its wide equity options are industry-leading.
Tobias Robinson Reviewer
Pros
- IBKR is a highly respected brokerage, regulated by top-tier authorities, ensuring the integrity and security of your trading account.
- Interactive Brokers has introduced a single platform linking prediction markets on Kalshi, CME Group, and ForecastEx. Users can trade yes/no contracts on political, economic, and climate events, with fixed $1 payouts. Enjoy 24/6 market access and earn interest on eligible positions.
- The TWS platform is tailored for intermediate and advanced traders, featuring over 100 order types and a dependable real-time market data feed with exceptional uptime.
Cons
- TWS has a steep learning curve, making it difficult for newcomers to navigate and grasp its features.
- IBKR offers a variety of research tools, but their inconsistent placement across trading platforms and the 'Account Management' webpage creates a confusing experience for users.
- Support can be sluggish and frustrating. Tests reveal that you may face challenges reaching customer service quickly, which could result in delays in issue resolution.
Our Take On Vantage FX
Vantage is an ideal choice for CFD traders looking for a well-regulated broker with access to the dependable MetaTrader platforms. With a swift sign-up process and a minimum deposit of $50, starting trading is simple and fast.
Tobias Robinson Reviewer
Pros
- Vantage upholds a high trust score through its solid reputation, backed by premier regulation from the FCA and ASIC.
- In 2026, the app was enhanced to provide comprehensive asset visibility, consolidating balances from Contract, Copy, and Funding accounts onto a single screen.
- Vantage has enhanced its trading tools for experienced traders, introducing AutoFibo EA to pinpoint potential market reversals.
Cons
- It's unfortunate that some clients must register with the offshore firm, which provides reduced regulatory safeguards.
- To access optimal trading conditions, a substantial deposit of $10,000 is required. This includes a commission of $1.50 per transaction per side.
- Based on tests, average execution speeds of 100ms to 250ms are slower compared to other options.
Our Take On IG
IG offers a complete package: an easy-to-use web platform, top-tier beginner education, enhanced charting via TradingView, up-to-date data, and strong trade execution for seasoned traders.
Tobias Robinson Reviewer
Pros
- IG excels with its diverse instruments, offering stocks, forex, indices, commodities, and cryptocurrencies. Additionally, it provides US-listed futures, options, and an AI Index, ensuring varied diversification opportunities.
- IG is aiming to expand its market roster with prediction markets covering politics, sports and entertainment in the UK (subject to it being granted a UK gambling license), with other regions potentially to follow.
- IG secured a crypto asset license from the FCA, enabling its return to the UK market. It now offers buying, selling, and storage services for over 55 digital tokens with fees starting at 1.49%, all under FCA regulation.
Cons
- Beginners may find IG's fees complicated, as they vary depending on the trades or services. This could cause confusion and unexpected costs.
- IG has ended its swap-free account, diminishing its attractiveness to Islamic traders.
- IG imposes a monthly inactivity fee of $12 to $18 after two years, discouraging occasional investors.
70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Our Take On Forex.com
FOREX.com excels in serving traders of all levels, offering more than 80 currency pairs, spreads starting at 0.0 pips, and competitive commissions. Its robust charting platforms provide over 100 technical indicators and comprehensive research tools.
Tobias Robinson Reviewer
Pros
- With more than two decades of expertise, strong regulatory governance, and numerous accolades, including a second-place finish in our 'Best Forex Broker' awards, FOREX.com is globally renowned as a reliable trading platform.
- The in-house Web Trader remains a top-tier platform for budding traders, featuring an elegant design and more than 80 technical indicators for market analysis.
- FOREX.com provides top-tier forex rates beginning at 0.0 pips, along with attractive cashback rebates up to 15% for dedicated traders.
Cons
- FOREX.com's MT4 platform provides around 600 instruments, a notable reduction compared to the more than 5,500 options on its other platforms.
- US clients are not protected against negative balances, which means you could end up owing more than your initial deposit.
- Demo accounts are typically limited to 90 days, hindering effective strategy testing.
Our Take On Eightcap
Eightcap excels for traders, offering diverse charting platforms, educational Labs, and AI tools. With over 120 crypto CFDs, it stands out in crypto trading and has won our 'Best Crypto Broker' award twice consecutively.
William Berg Reviewer
Pros
- Eightcap has excelled in all essential trading areas, surpassing all rivals to clinch our 'Best Overall Broker' award for 2024. It also earned the titles of 'Best Crypto Broker' and 'Best TradingView Broker' for 2025.
- In 2026, Eightcap integrated TradeLocker in select areas, establishing itself as the premier regulated broker for this platform. It continues to offer ultra-fast execution and competitive fees for active traders using the charting software.
- Eightcap has launched GOLD247, offering 24/7 gold/USD CFD trading with up to 1:20 leverage, 0.01-lot minimums and zero commission for weekend gold traders.
Cons
- Despite the growing range of tools available, Eightcap lacks popular industry resources such as Autochartist and Trading Central. These provide advanced charting analytics, live news, and essential market insights for traders focused on short-term strategies.
- Eightcap must enhance its range of over 800 instruments to rival top competitors like Blackbull Markets, which offers 26,000+ assets, especially improving its limited commodities selection.
- The demo account is available for 30 days, after which it requires a request for extension. This is less convenient than XM's offering, which provides an unlimited demo mode.
71.28% of retail traders lose money when trading CFDs
What are Bond Spreads?
What are bond spreads? The bond spread is the difference in the yield of one bond and another bond.
Specifically, it is used to describe the yield spread difference of the bond yields of two countries. In the forex market, the difference in the interest rate yields of two countries form the basis of the carry trade in forex. The carry trade is the practice of purchasing (i.e. taking a long position in) the currency of a country with a higher interest rate, and shorting the currency of a currency with a lower interest rate at the same time, with the expectation of earning an interest payment on overnight positions throughout the duration of the trade.
After the dot.com bubble of 2000, many hedge funds and investors decided to look for more guaranteed ways of earning from the market, and many of them went to countries with higher interest rates such as Australia and New Zealand, abandoning the bonds of the US (whose interest rate was less than 2% at the time) and Japan (whose interest rate was less than 0.6%). This led to a period between 2001 and 2008 when there was massive capital shift towards the Australian Dollar and the New Zealand Dollar in the forex market. At the height of the carry trade, the interest rate of Australia was at 8.25%. This strategy unwound when the global financial crisis hit, forcing the Australian government to sequentially drop interest rates as part of a coordinated stimulus for the global economy undertaken by the world’s major central banks.
Now how do bond spreads influence trades in the currency market? From what we have just discussed, it is obvious that when the bond spread between two countries widens, traders will naturally gravitate towards holding more of the stronger interest yielding currency, and this increased demand for one currency over another will lead to appreciation of that currency in the forex market. This was what pushed the carry trade strategy and a look at the historical charts of the AUDUSD, AUDJPY, USDCAD, NZDJPY and NZDUSD. Again, due to the sheer volume of these trades from hedge funds and high net-worth investors as well as other institutional investors, the extent of the appreciation of these currency pairs was enhanced.
So for a trader wishing to trade the forex market using bond spreads should simply look for a currency pairing that matches a higher yielding currency with a lower yielding one, subscribe to news services that give the trader information as to the order flows, and take a long position on the currency with the higher bond yield while shorting the currency with the lower bond yield.
The Technique of Trading Forex With Bond Spreads
When trading forex with bond spreads, the following information is what the trader needs to get in order to get the timing of the trades right:
a) Order flows.
b) Change in yield spreads.
c) Economic assessment by the central banks with regards to monetary policy.
Order Flows
Whenever a carry trade opportunity exists, for instance when a country like Australia or Canada start to raise interest rates again as a result of inflationary pressures, and Japan and the US keep their rates at all-time lows, we will see the big dogs pushing their money into these higher yielding currencies once more. If you use an institutional trading platform with Level II quotes, you will get an idea of the volumes held in a particular currency by certain big players in the market. Such order flows will immediately tell a trader when a higher-yielding currency has assumed a very strong bid status.
Change in Yield Spreads
Certain conditions can cause the yield spreads to start changing very fast. One of those situations is when the markets assume a “risk-off” appetite, or when investors become risk averse. Risk aversion has a very potent forex market impact, and typically arises when there is a negative trade balance situation. The trade balance is one of the news items released in the forex markets. When a country spends more than it makes and racks up a high deficit, investors get easily spooked because this is a sure sign that a country may default on its bond payments. Such countries are therefore forced to offer investors higher interest rates as an incentive to get them to continue to buy bonds. In the forex market, this sets off a risk aversion-based portfolio adjustment where currencies with higher yields are sold off. This causes a depreciation of these currencies. So a trader in the forex market can simply sell a higher yielding currency when there is a situation of risk aversion in the markets.
The same situation also occurs if a country with a high interest rate has to start cutting rates to stimulate its economy. We can see that change in yields also works for downside trades as well as upside trades. It is simply a matter of knowing what to do in certain market situations.
Economic Assessment with Regards to Monetary Policy
Following on from the last paragraph, we will round off this discussion by stating that whatever factor(s) that force a central bank to reconsider monetary policy must be taken into consideration by traders who want to trade forex based on bond yields. Central banks understand that interest rates can be used to control the level of inflation in an economy, and this happens in two ways.
Firstly, by increasing the interest rate in a country, a central bank will make it more expensive to access finance and this restricts monetary supply and will therefore keep prices in check. Secondly, increasing interest rates will push investments into an economy as investors seek to make more money from that country’s bonds. This will keep that country’s currency strong and prevent the runaway inflation that plagues countries whose currencies experience sharp depreciations.
These relationships can all be exploited by traders who wish to trade forex using bond spreads.