I know it's surprising but it kinda does. If the forward exchange rates were always higher and the spot rates were always flat you could: Promise to sell 100 Yen for in the future $1.10 Wait Buy 100 Yen for $1.00 since the rate didn't change Sell 100 Yen for $1.10 and pocket $0.10 This strategy is by no means arbitrage but given those assumptions it would be profitable on average given those assumptions. So in general, currencies with low interest rates appreciate against currencies with high interest rates over time once the expectations about that currency's rate have reached a stable equilibrium. That last part is important as new information about lower rates would drastically drop the value of a currency just like you'd expect it to.

Yes but currencies dont stay flat and it is not clear that there is such a thing as equilibrium in the markets.