Although there may be risks to using bond spreads to forecast currency movements, proper diversification and close attention to the risk environment will improve returns. This strategy has worked for many years and can still work, but determining which currencies are the emerging high yielders versus which currencies are the emerging low yielders may shift with time.
Source: http://www.bktraderfx.com/site/members-benefits; http://investopedia.com/articles/forex/05/041305.asp
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