For investors sick of watching world currencies smack the U.S. dollar around in recent months, it has felt cozy to throw cash into an international bond fund and profit from fast-growing economies with relatively high interest rates.

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For investors sick of watching world currencies smack the U.S. dollar around in recent months, it has felt cozy to throw cash into an international bond fund and profit from fast-growing economies with relatively high interest rates.

But making money outside the U.S. is not the no-brainer it has been.

In the past year, the bet was simple: The U.S. economy was limping along and the dollar was weakening, so betting against the dollar by choosing foreign bonds in an international bond fund could give investors about a 9 percent return.

Now, however, some analysts think the world might be poised for a change, with the dollar strengthening and Europe, Japan and some other areas positioned for economic problems of their own. If those countries cut their interest rates to stimulate economic growth, their bonds will no longer have the allure they have had. And if the U.S. is done with its own interest-rate cuts — as many analysts believe — then the dollar will look sweeter to investors.

So investors could be taken by surprise by the thrashing they will endure if the dollar does indeed strengthen for a while and causes people to lose money on a bet against the currency.

An example is clear in the iShares Euro Government Bond 7-10 fund. With the dollar regaining significant strength during the last four weeks, a U.S. investor counting on the European bonds would have lost about 5 percent, according to Alex Claringbull, senior fixed-income portfolio manager for iShares.

A European investor would have made about 1 percent on the fund during that time, but in dollars, money was lost because the euro weakened against the dollar.

“These are interesting times in the currency markets,” Claringbull said. “They are very volatile.”

Whether the dollar will continue to strengthen against the euro and other currencies is not yet clear.

“It’s too early to know,” Claringbull said.

There’s nothing wrong with diversified investors holding some international bonds for the long run. But those making a one-way bet against the dollar, without being diversified, could be disappointed.

Analysts such as Stephen Jen of Morgan Stanley believe “we are at an important inflection point for currency markets — that the dollar may be forming a multiyear bottom against the majors and may also rally against some emerging-market currencies.”

In the quarters ahead, he thinks many foreign economies will “underwhelm” investors as they weaken further because of high oil prices, high interest-rate policies, less trade with the U.S. and housing bubbles in European countries as well as the U.S.

As those economies deteriorate, Jen expects the dollar to recover “more by default than on merit.”

The U.S. economy remains troubled, but the rest of the world is in the early stages of weakening — with unwelcome surprises ahead, while the U.S. could be closer to the end of its problems.

“In some respects, we are somewhat stunned by the inability for investors to comprehend the global nature of the slowdown,” said Citigroup strategist Tobias Levkovich. “The slowdown that may have started in the U.S. appears to have spread viruslike to other parts of the world.”

He describes the statistics out of Europe lately as “profoundly and uniformly awful, almost suggesting that America is doing well by comparison.”

Retail sales, home prices and orders by businesses are poor, he said, and “Asia is showing many signs of strain as well.”

Japan is expected to post a negative gross domestic product. Levkovich said that Japanese shipyards have begun to see orders canceled, and Citigroup machinery analyst David Raso recently visited Turkey and heard from construction-equipment dealers that demand was weakening.

Levkovich says investors seem slow to see that the globe has changed dramatically.

Although many investors assumed that the rest of the world would be a safe haven from U.S. financial problems, Levkovich said, “the decoupling thesis has not worked one iota, with the best one can say being that things were delaying in other regions of the world.”

Morgan Stanley economist Richard Berner also noted in a recent report that, “The fallout is spreading to some hitherto-strong Asian economies. Economic activity in New Zealand contracted in the first quarter, and in Australia retail sales volumes have fallen for two consecutive quarters.”

In the Asia-Pacific area, without Japan, expected corporate earnings growth for 2008 has fallen to 3.9 percent, from a previous estimate of 9.2 percent, according to Morgan Stanley strategist Mal Wood.

“In Europe, slipping export growth and rising energy prices have combined to undermine business confidence even in resilient Germany,” Berner said. “Smaller economies of Denmark, Spain and Ireland flirt with recession.”