“The dollar has been getting stronger because interest rates are going up here versus the rest of the world,” McCarron added. “Even after adjusting for inflation, interest rates in the U.S. market are higher than in Europe, Japan and in many cases emerging markets.”

Nevertheless, if investors could get a handle on the potential currency risks of investing in local currency-denominated debt in international markets, there are some attractive opportunities around the world.

For example, investors can look to something like the Vanguard Total International Bond ETF (NasdaqGM: BNDX), which tracks Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged), a currency-hedged index with global debt exposure.

The iShares Core International Aggregate Bond ETF (NYSEArca: IAGG), which tracks the Bloomberg Barclays Global Aggregate ex USD 10% Issuer Capped (Hedged) Index, also provides broad global bond exposure with a currency hedged component to limit the negative effect of foreign exchange currency swings.

Investors who are interested in the international debt market but are wary of forex risks can also look to the Deutsche X-trackers Barclays International Treasury Bond Hedged ETF (BATS: IGVT) and Deutsche X-trackers Barclays International Corporate Bond Hedged ETF (BATS: IFIX). The two funds enter into forward currency contracts designed to offset their exposure to foreign currencies by selling the applicable foreign currency forward at the one-month forward rate.

For more information on the fixed-income market, visit our bond ETFs category.