There are two currency exchange traded funds (ETFs) for investors who do not have access to a currency trading account. If you want to harness the upside of the yen, CurrencyShares Japanese Yen Trust (FXY) could help you out. The Swiss franc is yielding the second lowest interest rate, so look into CurrencyShares Swiss Franc Trust (FXF) which has gained 1.2% during the last week.  Matthew D. McCall for Seeking Alpha believes the debate between further unwinding of the yen carry trade will go on for weeks, if not longer. The above two ETFs would let investors participate in the unwinding and even if it doesn’t happen, both funds should perform with the weakening U.S. dollar.

"Carry trade" refers to the strategy currency traders have implemented with the Japanese yen for years. They borrow money at a low interest rate, convert the money into a different currency, and invest the money into a higher yielding bond. The 0% interest rate in Japan speaks for itself. There are current reports suggesting that traders are going to unload, as the yen rallies and the U.S. dollar falls. The unwinding would equal a buyback of the yen and a selling of other currencies, resulting in a liquidity crunch across the globe.

Carry trade or not, the two ETFs offer good options for investors seeking foreign currency, if it fits in their portfolio objectives.

Read the disclosure, as Tom Lydon is a board member of Rydex Funds.

Tags: Currency ETFs, Japan, Switzerland