If China increased value of Yen five percent, then would it not take 5% more dollars to pay interest on bonds. Would it be correct to say interest rate increased 5%. Since just stated seems too simple, is there a way to calculate effect of currency change on yield in dollars to state effect equivalent in interest rate?

First, I think you mean Yuan (CNY). Yen is the currency of Japan (JPY).

Second, I think you might have confused the relationship between currency depreciation and appreciation. If China increases the value of the YUAN relative to the US Dollar, it would be demanding more US Dollars (USD) for every Yuan…in other words your first sentence don’t make sense to me.

Simple example (which may or may not work in the real world):

If the current exchange rate is 1 USD for 6.85 CNY, then a 5% appreciation of the Yuan would result in 1 USD for 6.50 CNY.

The problem answering your question directly is that your question seems to be assuming at least two things that aren’t actually true in the real world. (1) Currency changes are relative (between two particular currencies) not absolute (a country cannot use currency changes to simply increase prices, for example). (2) Debt repayment agreements (like bonds) are stated with repayment terms that often make your situation irrelevant.

(2 cont) For example, US Treasury bonds are payable in USD not the currency of the bond holder. An increase in the value of the Yuan would decrease the value of the interest payment to China in its home country by 5% but not change the actual value of the payout from US side of the equation.

On a $1 million bond a 2% annual interest payment is worth $20,000 UST. The UST is going to pay $20,000 USD per year to the holder in USD regardless of the value of the holder’s home currency. If the holder exchanges the USD for CNY, they will take a 5% loss (6850 less CYN), resulting in a net interest payment that is lower than 2%. If the bond is repaid as well, the principle will result in the same 5% loss if translated into the stronger home currency.

In absolute terms the interest rate expressed in Yuan is the same (2%). In relative terms, they have lost 5% across the board (349, 350 CYN).

My father is willing to pay me to use a Foreign Currency Trading software basically all day every day. But, we’ve researched that it is a large investment to get the software to be able to do it. They’re advertising that if you do it all day, everyday you can make "a lot" of money per year off of this. I am concerned before we pay for the software if the program really does work and if you are able to make money off of it?

To make money on currency trading you need to work in large volumes. Often the margin of profit is 1%. Companies that do this need large reserves.

What eats up to profits, is the exchange of currency comes with a fee. Shopkeepers in tourist areas –like Bermuda– often find it cheaper to have the employees separate the US from the local currency before going to the bank.

I suspect what will happen is you will be paying the company to stay in business.
Is it worth it? Only if you have large amounts of money. Does it work? Not for small investors.

there are many online trading websites to trade currency online. Which one is best and trustful?

Hi Nishan,

I am glad you asked this question because it is something we all need to know.

According to the general online consensus Easy-Forex has been shown to be a dependable platform for forex traders.

Easy-Forex is an excellent option for people who are looking for a forex trading platform.

Among many platform reviews easy forex is the highest rated and most recommended by real users.

Hope this helps and if you want some more advice just contact me
-Ryan

I understand that you buy currency in "lots" and depending if they go up or down in value you make in profit or loss.

I just don’t understand why the currencies are paired like "EUR/GBP".

Can someone help me understand the actual process taking place when people trade currency?

In simple word:

EURGBP = you have / use EUR to buy GBP, the exchange rates is 1 EUR = xxx GBP

I have been learning about currency trading for a couple years now. I am planning on investing in the short term, but I am afraid currency trading might be considered usury or something that could be considered sinful. I know Christians who trade or are somewhat involved in trading, but I don’t think I should do as they do only because they are Christians and therefore, right. I do not want to offend God. I hope I can get serious answers. Thank you so much in advance for your help. May God bless you all.

My parents are extremely strict fundamentalist christians and they currency trade….if they do something I guarantee its not a sin or theyd be repenting by now…trust me.

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Forex Trading Basics: Tools, tips, articles and Forex strategies. … They will make decisions with no hesitation. Take your fx trading to their level … Brokers can earn money through setting spreads where they value the process … The first advantage being that the system will do the currency trades for you.
Make Money Through FOREX Currency Trading – Foreign Exchange FX Guide Strategies System Tips

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Make Money Through FOREX Currency Trading Foreign Exchange FX Guide Strategies System Tips broker forex trading street education technical analysis information free training systems learn currency exchange investing make money online eran

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A lesson on how the retail forex broker fits into the picture and gives individual traders of the foreign exchange, forex, or currency market access to a level of pricing that was not available before.

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http://www.smctrader.com – This video demonstrates how you place a short currency trade (margin FX on the SMC Trader.

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http://www.ForexAutopilotRobot.com – Which Currency Trading Software is the Best to Trade In? Manual Or Automated?
Do you still remember where every trade and business had to be monitored in the newspapers? Those days were long gone with the explosion of ICT, bringing with it faster and more convenient ways to trade. Then came the next problem. Which currency trading software is the best to trade in?

Manual or Automated?
Sounds like you’re choosing types of cars ya. Well, it goes by the same principles. Choose manual software if you want to do your own monitoring and trading. Use automated software if you prefer to let the software to trade for you. You might wonder which one works the best.

Well, both of them work as well and the only difference is whether you want to do the trading yourself or not. Manual software works best with investors who are experienced and believe in themselves more to make the trade. Automated trading mode works well for those who are new to forex trading and those who are too busy to be staring into the computer screen whole day.

Performance Record
Another great way to find an effective trading software is by checking their track records. Before you actually pay for those software, you can read up on customers’ testimonies and of course comparison charts that you can read on the Net. If you’re vying for manual software, it would make little difference as you’re making the trades your own anyway.

For automated software however, you really need to read up before buying and realizing that your software actually incur more losses than earnings. Determine which software to choose by looking at how successful they have predicted and scour money over the years.

Support system (back-up)
Like all software, they eventually crash for one reason or another. Therefore, it is very important for you to choose a software that has a good back-up plan to prevent further losses. Support system would include efficient customer service which will be able to answer your problems right away. The best guarantee will be to choose a software that is reliable and proven over the years.

Ok, you should have an idea which software to trade in.
Now what’s the next step to achieve you online currency trading success?
Which Currency Trading Software is the Best to Trade In? Manual Or Automated?
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I want to start trading currency on the foreign exchange but am not sure if I would need to report my returns as income on my federal income tax return. If I do need to report it, how so?

Yes you are supoposed to claim any income tha tyou receive on your taxes.

This advice was prepared based on our understanding of the tax law in effect at the time it was written as sit applies to the facts that you have provided. http://www.hrblock.com/taxes/tax_tips/index.html
http://www.hrblock.com/taxes/tax_calculators/index.html

Christine