Currency-Indexed Treasury Securities?

Since 1997, the US Treasury department has issued inflation-indexed Treasury Notes and Bonds. These securities promise a real return to investors by increasing or decreasing the pricipal and interest payments as the US Consumer Price Index (CPI) rises or falls.

However, the inflation indexing does not remove all sources of risk from the bonds. Another source of risk for both domestic and foreign investors are fluctuations in foreign exchange rates. The US dollar has fallen by 43% against the euro since June, 2001 and by 28% against the British pound.

Should the Treasury department issue Notes and Bonds that are indexed to some trade-weighted foreign exchange rate index? Or perhaps some indexed to specific currencies such as the euro, pound, or yen?

I doubt that this will happen. But it is interesting to speculate on how the bonds would be priced if they did.