I have traded FX for years, both at banks and on my own account. While I have been moderately successful in doing so, I've recently become intrigued with the idea of backtesting a number of trading strategies I have come up with over the years. I have access to Reuters and Bloomberg terminals, and all the historical data I need. But when using this historical data to backtest trading strategies, how do I account for the cost of carry of being long or short the higher interest rate paying currency? In otherwords, my models simple use the historical spot FX data but I'm not sure how to account for the daily interest that is earned or paid on a daily basis when rolling the spot position. So my backtested results could be very unreliable... Anyone have a simple solution to account for this?