Three main factors affect the dollar value of a foreign-currency-denominated bond interest rate movements, foreign exchange rate movements and their interactions. Changes in a foreign bond's interest rate can be attributed to factors affecting the international capital markets as a whole ("global') and to elements specific to the particular foreign economy ("local'). Duration is an inadequate description of a foreign bond's price sensitivity to overall interest rate movements, because it ignores the significant differences in interest rate volatilities across markets.