US currency

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• foreign currency transaction vs foreign currency translation

  To account for those transactions on the US books, the conversion to US currency is made as of the date of the transaction.

• International Financial System

  The basis for the prediction that the Renminbi will overtake the US dollar because the Chinese currency will overtake the US currency.

• Trade Deficit and Reserve Currency

  The decline in the value of dollar is because of the large trade deficit of US. The trade deficit of US is increasing continuously, which is also affecting the US economy. But it will not affect the status of US dollar as reserve currency.

• Depreciation in US Dollars

  The US consumers have higher international purchasing power as reflected in large number of foreign goods in US. d. Currency appreciation and depreciation.

• Swap driven financing the defining features of interest

  IBM used the currency swap as an expedient way to effectively convert Swiss franc debt into US dollar debt, without actually retiring the existing Swiss franc debt and reissuing new US dollar debt.

• Role and Future of the US Dollar

  US dollar is a dominant currency in the world so many countries endorse their own currency with US dollars reserves.

• Interest rates

  For US, if this year, US has imported more goods, then appreciation benefits US; if US exports more goods, then appreciation will hurt the US economy. Interest rates

• International Accounting - Foreign Currency Translation

  A foreign currency transaction will be remeasured if the foreign entity's functional currency is other than the US dollars.

• Distinguish between foreign transactions & currency transactions

  For instance, if you report in US dollars, you may purchase goods from a German firm but the transaction may be in US dollars. That is a foreign transaction but not a foreign CURRENCY transaction.

• Leads and lags in the transfer of funds

  Suppose a Polish firm has to make a payment of $1,000 to a US firm. The current exchange rate is 2 zlotys = 1 US dollar. The zloty is expected to depreciate to 3 zlotys = 1 US dollar.