I have seen two methods for calculating the value of a xccy swap -
1) Convert the future foreign payments to the base currency using forward FX rates, net with the base currency payments and discount using the risk-free rate for the base currency.
2) Discount the foreign payments using the foreign risk free curves and convert to the base currency using the spot rate. Discount the base currency payments with the base/foreign basis curve and net with the foreign payments.
It seems to me that if I calculate the forward fx prices using a simple interest rate differential, then the basis curve should match the base risk free curve. Am I correct in this view and if so, how does one calculate forward fx rates to yield a result equivalent to the basis curve method?
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