savings-investment approach to FX forecasting

CFA Level III Economics
#1

there are four approaches to forecasting exchange rate(FX) movement. under the last one, savings-investment approach, textbook mentioned domestic savings and investment is low relative to spending on a whole, hence incurring dual deficits and borrowing from foreign investors, a huge current account deficit.

this arise from higher interest rate, or higher attractive investment returns, and hence FX is expected to rise?

Can anyone explain this why the currency with a CA-deficit is expected to rise?

#2

When there is a Savings- investments deficit, this means that investments are higher than savings. Which means that a lot of investors are seeking liquidity in the domestic currency for their investments and accordingly, the domestic currency is expected to appreciate.

#3

Not just any investment… The key word is foreign investments, which you fail to mention.