President Barack Obama and Dominique Strauss-Kahn, managing director of the International Monetary Fund, both told Chinese officials that letting the yuan appreciate would help the global economy. Chinese President Hu Jintao and other Chinese officials and economists,  however, continue to defend the country’s current currency policy, reports Andrew Batson for The Wall Street Journal. (Why strong yuan may be a good thing)

With exports for the year down about 20% and many manufacturers closed, China is loath to let the yuan appreciate because it would make exports more expensive overseas. Currently, the Chinese economy is recovering at the expense of European and Asian competitors since the U.S. dollar, along with the pegged yuan, is falling. Most private analysts don’t see any changes to China’s policy with the yuan anytime soon.

Strauss-Kahn has stated that China needs to “look more forward to investment and to long-term stability.” A stronger currency would help a Chinese household’s purchasing power, which would support economic growth from within the country.

Not everyone agrees. World Bank Chief Economist and former Chinese government adviser Justin Yifu Lin argues that a stronger yuan could hamper China’s export sector and possibly China’s entire economy, which would have a negative affect on global growth.

According to WisdomTree, there are several factors that favor an appreciating yuan relative to the dollar in years to come:

• Long-term economic growth potential.
• Emerging role as an economic leader in the world arena.
• Diversification away from the dollar by arranging trade agreements using the yuan with other countries.
• A gradual transition from an economic model focused on exports to one focused on domestic consumption.
• Rising yuan valuation as China develops even further. Emerging market currencies are often valued at a discount to long-term purchasing power because of risks associated with emerging markets.

For more information on the Chinese currency, visit our Chines yuan category.

• WisdomTree Dreyfus Chinese Yuan Fund ETF (NYSEArca: CYB): up 1.8% year-to-date; expense ratio is 0.45%

Max Chen contributed to this article.

The Chinese government may let the Chinese yuan appreciate against other currencies, which means better exports and better growth for everyone – except China, reports Jeff Cox for CNBC. (Reasons to watch China).

European and U.S. manufacturers would stand to gain the most since their products would be cheaper in China. Revenue would also get that extra kick when exchanged back to domestic currencies. The U.S. trade deficit with China would also diminish, giving the U.S. economy another boost.

Of course, there are drawbacks to a stronger yuan. Higher prices on Chinese goods could push up inflation in the United States and force the Fed to raise interest rates faster than desired. Investors also see that the Chinese monetary policy is a linchpin in the prevention of a trip back to global recession.

Investors can take advantage of the yuan with the WisdomTree Dreyfus Chinese Yuan Fund ETF (NYSEArca: CYB). CYB tries to reflect money market moves in China and changes in the yuan against the dollar. China may soon need to begin a tighter monetary policy to control inflation. Any Fed moves to raise U.S. interest rates will likely be mirrored by China’s boost to the yuan. (How to play China’s currency)

For more information on global currencies, visit our currency category. Or, take a look at our ETF Trends’ guide to currency ETFs.

• WisdomTree Dreyfus Chinese Yuan Fund ETF (NYSEArca: CYB): up 1.8% year-to-date

Max Chen contributed to this article.

Because of government restrictions, capital controls and sometimes liquidity issues, WisdomTree applies currency contracts, or non-deliverable forwards, and U.S. dollar-denominated short-term government and commercial paper in its foreign currency funds, writes Don Dion for TheStreet.

A forward contract is an agreement to exchange currencies at a predetermined rate at a specific time. The benefit is that the contracts allow foreign investors to gauge the return of a money market fund in a foreign currency. (Read our currency special report).

WisdomTree uses forward contracts to reflect foreign currency holdings in its Chinese, Brazilian and Indian currency ETFs. Its Japanese yen and euro ETFs hold short-term yen  and euro debt. WisdomTree’s currency ETFs have been outperforming the underlying currency thanks to implied yields in forward contracts.

• WisdomTree Dreyfus Chinese Yuan Fund ETF (NYSEArca: CYB): up 1.8% year-to-date
• WisdomTree Dreyfus Brazilian Real Fund ETF (NYSEArca: BZF): up 35.7% year-to-date
• WisdomTree Dreyfus Indian Rupee (NYSEArca: ICN): up 9.5% year-to-date
• WisdomTree Dreyfus Japanese Yen Fund ETF (NYSEArca: JYF): up 0.5% year-to-date
• WisdomTree Dreyfus Euro Fund ETF (NYSEArca: EU): up 8.6% year-to-date

Interest rates are a major determinant in forex prices. For example,  country “X” has a higher interest rate than country “Y,” and a person from country “Y” purchases a forward contract to exchange currency “Y” back to currency “X” at 2-to-1 in one year. A person would lock in the exchange rate in the future and would profit from the higher interest rate with no risk – this is known as arbitrage. Traders would then buy up the foreign currency until the exchange rate no longer overcompensates for the higher foreign interest rates.

Potential currency traders should note that trading in currencies includes risks, and trading in emerging market currencies carries even more risk. Have a strategy when you invest.

For more information on foreign currencies, visit our currency category.

Max Chen contributed to this article.

A case in point: while both WisdomTree Dreyfus Chinese Yuan Fund (NYSEArca: CYB) and United States Natural Gas (NYSEArca: UNG) use forward contracts, they differ in how they work.

Don Dion of the Street.com has an excellent piece that explains the differences between the two ETFs and how they handle futures contracts. He states that a premium found in CYB is caused by factors that differ from those that led to a premium in UNG.

This summer, UNG paid a premium between the contracts it was selling and those that it was buying. Each time UNG sold a contract, it sent the price of that contract lower and raised the price of the contract it was buying.

In CYB,  the premium it pays is because traders believe the Chinese currency will appreciate. (Read our special report on currencies). Already this year, CYB is up 1.8% this year – more than the 1% the currency itself has gained.

Commodity investors can alleviate contango by buying a 2010 futures contract, but currency traders can’t get around the premium for the yuan. (What’s contango?)

Other factors in this issue include:

• Speculative demand. If traders believe a currency will gain, they’ll bid up forward contracts.
• Storage issues. Higher futures prices are based on the costs of storage; currencies don’t need storage, so this issue is moot for them.
  

For more stories on currency ETFs, visit out currency ETF category.

For full disclosure, Tom Lydon’s clients own shares of UNG.

Kevin Grewal contributed to this article.

The Chinese yuan has been allowed to slowly appreciate against the dollar, but the government still keeps a tight rein on it so it doesn’t veer too far from the dollar, writes Murray Coleman for IndexUniverse. Many see this as a way to deliberately lower market rates as a way to keep up the country’s exports.

If you believe China will continue to relax its hold over its currency, then investing in the yuan could prove to be worthwhile. Two funds currently target the Chinese yuan: WisdomTree Dreyfus Chinese Yuan (CYB) or Market Vectors Renminbi/USD ETN (CNY).

CYB follows forward currency contracts to access ultrashort-term Chinese bonds and CNY tracks an index of nondeliverable yuan forward contracts. CYB is actively managed and the managers try to find the best forward contracts with 1- to 3-month maturities. CYB has an expense ratio of 0.45% and CNY is 0.55%.

Two major differences exist between the funds:

• The structure. CNY is an ETN whereas CYB is an ETF. CNY is a debt instrument issued by Morgan Stanley (MS), so investors are exposed to credit risks of the underlying bank. ETFs like CYB have given investors the opportunity to lower expenses, add greater diversification to portfolios and provide better returns with lower risk.
• How an investor gets income. CYB makes quarterly income distributions, whereas CNY does not pay out interest income. Any income an ETN receives is added to the share value of the note, which could create problems for some because the IRS has ruled that investors should pay taxes each year on notional interest.

• WisdomTree Dreyfus Chinese Yuan (CYB): up 2.1% year-to-date

• Market Vectors Renminbi/USD ETN (CNY): up 2.5% year-to-date

For more information on China, visit our China category. If you’re interested in other world currencies, take a look at our ETF currency guide.

Max Chen contributed to this article.

The Forex Market

The foreign exchange market, also known as the forex market, is the largest market in the world. In 2007, for example, it garnered $3.2 trillion worth of transactions each day. It’s the quiet giant of finance and dwarfs all other capital markets worldwide.

Unlike most other trading, such as futures, stocks or options, forex trading doesn’t happen on an exchange. It’s not controlled by any governing body, has no central exchange and there are no clearing houses involved guaranteeing trades. It’s a global network, made up of banks, corporations and individuals. The forex is also the most liquid market – there are always ready and willing buyers and sellers for the currency someone is seeking to trade.

The vast majority of currency trading is done bank-to-bank, and when each party enters into an agreement, they both take on the counterparty risk of the other. They’re not only competitors, but they’ve got to cooperate, as well.

There’s no actual buying and selling in the currency market – only trading, hence the need for cooperation.

Exchange traded funds (ETFs) have made entering this market much easier than it used to be. Prior to the launch of currency-related ETFs in 2005, the forex was a challenging market for individual investors to gain access to. Many investors might find this simplified access appealing, especially when you’re talking about a market that’s open 24 hours a day. If you’ve been eager to play this market, there are a rapidly growing number of opportunities to play the currency markets in the form of both ETFs and exchange traded notes (ETNs), which we’ll detail later.

Currency Basics

When entering the currency market, much of the focus is on the eight major currencies, which give you the best over- or under-valued opportunities. The eight major countries that make up the currency trading market are the United States, the Eurozone (Germany, France, Italy and Spain), Japan, United Kingdom, Switzerland, Australia, Canada and New Zealand.

There are many, many more currencies beyond the eight majors, such as the Brazilian real, Polish zloty and Hungarian forint.

Some of the key points to consider when you’re investing in currencies are:

• When trading currencies, yield drives return. Every currency has a yield.
• The forex allows huge leverage; often as high as 100:1 – which means that you can control $10,000 worth of assets with as little as $100 of capital. Remember, leverage works both ways, though.
• Since currency values never stay the same, the carry trade became a popular theory. Carry traders hope to earn not only the interest rate differential between the two currencies, but also look for their positions to appreciate in value. We’ll discuss this in more detail in the next section.
  
• Interest rates matter – a lot. Becoming familiar with the economics of the country in which the currency you are trading holds will help you understand when inflation is looming and when opportunity is knocking.

In currency markets, there’s always a bull somewhere. Why? The foreign exchange market is all about opposites and all about relativity. As one currency gains value, another has to be losing.

Dan McCabe, CEO at Next Investments, points out that one of the biggest advantages to investing in currencies is that it’s a great way to get non-U.S. dollar exposure.

“As an investor, I have nearly all my stuff in U.S. dollars. When I want to buy something, it’s often foreign-made. If I don’t have a hedge for the fact that the U.S. dollar may depreciate, I’m just losing my buying power on the world stage.”

For example, have a look at this five-year chart of the euro vs. the U.S. dollar. For the last three years, the euro steadily gained before falling off mid-way through 2008:

This means that as the euro gained strength, perhaps tourism in Europe suffered as Americans couldn’t afford to go over there and spend as much. But on the flip side, it likely brought tourists over here who were itching to spend and find bargains. Currency is all about relationships, and a currency being either weak or strong doesn’t necessarily mean it’s bad or good.

McCabe sees currencies as more of a buy-and-hold hedge instead of getting caught up in trading. “You’d rather just come in, buy it and put it away and look at it like a foreign money market account,” he says.

The Carry Trade

One of the most popular ways for institutional investors to play currencies is with the carry trade. Putting it simply, the carry trade involves borrowing currencies from countries with low interest rates and investing it in high interest rate countries. The strategy aims to take advantage of the wide spread in interest rates between certain currencies.

As of June 24, some interest rates for various currencies were:

• Australian Dollar, 3%
• New Zealand Dollar, 2.5%
• Euro, 1%
• U.S. Dollar, 0.25%
• Japanese Yen, 0.1%

You can track these interest rates at Daily FX.

With these interest rates in mind, an investor utilizing the carry trade would want to buy Australian dollars with the much lower-yielding Japanese yen, which is one of the most popular carry trade combinations around.

The carry trade isn’t a risk-free strategy, though. One of the biggest risks is if the exchange rate devalues by more than the average annual yield. If you’re using leverage, your losses could be even greater.

ETFs have simplified the carry trade for retail investors. The PowerShares DB G-10 Currency Harvest (DBV) tracks the interest rates of the U.S. dollar, euro, Japanese yen, Canadian dollar, Swiss franc, British pound, Australian dollar, New Zealand dollar, Norwegian krone and the Swedish krona. DBV looks at the three-month interest rates of the G10 currencies and goes long on the three with the highest rates and short on the three with the lowest. The ETF seeks to capitalize on the trend that the currencies with high interest rates generally tend to rise in value relative to currencies that have low interest rates.

Currency Risks

McCabe points out that currencies are non-correlated assets. “The risk you have oftentimes is performance vs. the underlying currency you’re purchasing in.”

As an example, assume that $1 equals 1 yen. If the dollar increases in value, you might get 1 yen for 90 cents – great if you’re traveling to Japan when this happens. However, it’s not so great if you have an asset priced in yen that you bought when dollars and yens were of equal value.

The flip side also works: if the dollar falls against various currencies, you stand to make money on assets based in those currencies if you bought them before the dollar weakened.

When searching for currencies to invest in, McCabe looks at the country behind it. Political upheaval can wreak havoc on a currency.

“I would look for a stable country with strong jurisprudence and rule of law…a country you believe is going to be stable, in case of turmoil.”

Why Use ETFs Instead?

Investing in currencies on your own, without an ETF, can be an arduous task. The currency market is one that never closes. Twenty-four hours a day, trillions and trillions of dollars in trades are taking place. You could find yourself sitting up in the middle of the night, waiting for a key signal to pounce on a trade.

That probably doesn’t sound like the average retail investor’s idea of a good time.

There are now two options for exchange traded currency investing: ETFs and exchange traded notes (ETNs).

Two key differences between currency ETFs and ETNs are:

1. Currency ETNs (like all ETNs) are backed by the full faith and credit of the issuer. If the issuer goes under, you have to get in line with all the other creditors. It’s a small risk, but it’s one to keep in mind.
2. Currency ETNs linked to a single currency are treated like debt for federal tax purposes, according to a 2007 IRS ruling. It means that any interest is taxable to investors, even though the interest is reinvested and not paid out until the ETN is sold or upon maturity of the contract. It also means that investors can’t elect capital gains treatment.

Not all exchange traded currency products are structured in the same way, either.

McCabe points out that it’s wise to be aware of what makes currency products different from one another. For example, Rydex’s CurrencyShares funds are grantor trusts – they hold the actual currency.

The interest earned on them is accrued on a daily basis and reinvested monthly. This reinvested interest is then reflected in the fund’s net asset value (NAV).

On the other hand, PowerShares‘ currency ETFs, PowerShares DB US Dollar Bullish Fund (UUP) and PowerShares DB US Dollar Bearish Fund (UDN), hold futures contracts and are registered as open-ended ETFs. Any gains from futures contracts are subject to 60/40 tax treatment, in which 60% of the gains are long-term, 40% are short-term.

In the bullish fund, the futures contracts are designed to be long on the U.S. dollar against the euro, yen, pound, canadian dollar, Swedish krona and Swiss franc. The bearish fund is designed to be short on the U.S. dollar against those currencies.

WisdomTree’s currency income ETFs invest in either non-U.S. moey market securities, or in a combination of money market instruments designed to provide exposure to non-U.S. money market securities or rates. They are not money market funds. They seek to give investors current income reflective of foreign money market rates available to U.S. investors, as well as exposure to changes in the value of a specific currency relative to the U.S. dollar.

Market Vectors‘ currency ETNs are senior, unsecured debt securities that give exposure to the exchange rate between U.S. dollars and foreign currencies. The underlying indexes are also affected by movements in interest rates in the country of the underlying currency and that of the United States’.

Market Vectors and ProShares also have some double long and double short ETNs for investors looking to enhance their exposure. They aim to double the daily performance of a specific currency. Know the risks of short and leveraged funds before you invest, however. They aren’t for everyone.

Barclays’ iPath currency ETNs measure the relative values of two currencies. In the EUR/USD fund, for example, when the euro rises against the U.S. dollar, the fund increases, and vice versa. The provider also has a currency carry ETN, iPath Optimized Currency Carry (ICI), that seeks to capture the returns potentially available from a carry trade. The pool of currencies the index may apply its strategies are known as the “G10″ currencies, which includes the U.S. dollar, euro, Japanese yen, Canadian dollar and Swiss franc.

How to Choose

At this point, there are enough ETNs and ETFs targeting currencies that investors have a whole range of choices when it comes to figuring out how they want to play them. When choosing currency ETFs, consider the differences between the available funds, how they access currencies and their tax treatment. In short, know what you own.

Perhaps one of the easiest ways is via a broad basket of currencies, which help spread out the risk and lessen the blows a volatile stock market can deliver. Some examples:

• Barclays Global Emerging Market Strategy [GEMS] Asia 8 Index ETN (AYT)
• Barclay’s iPath Optimized Currency Carry Exchange Traded Note (ICI)
• PowerShares DB G10 Currency Harvest Fund (DBV)
• WisdomTree Dreyfus Emerging Currency Fund (CEW)

There are a number of single-currency funds available, as well, along with a number of others that are in registration:

• PowerShares DB US Dollar Bullish Fund (UUP)
• PowerShares DB US Dollar Bearish Fund (UDN)
• CurrencyShares Australian Dollar Trust (FXA)
• WisdomTree Dreyfus Brazilian Real Fund ETF (BZF)
• CurrencyShares British Pound Sterling Trust (FXB)
• iPath GBP/USD Exchange Rate ETN (GBB)
• CurrencyShares Canadian Dollar Trust (FXC)
• Market Vectors – Chinese Renminbi/USD ETN (CNY)
• WisdomTree Dreyfus Chinese Yuan Fund ETF (CYB)
• CurrencyShares Euro Trust (FXE)
• iPath EUR/USD Exchange Rate ETN (ERO)
• WisdomTree Dreyfus Euro Fund ETF (EU)
• Market Vectors – Indian Rupee/USD ETN (INR)
• WisdomTree Dreyfus Indian Rupee Fund (ICN)
• CurrencyShares Japanese Yen Trust (FXY)
• iPath JPY/USD Exchange Rate ETN (JYN)
• WisdomTree Dreyfus Japanese Yen Fund ETF (JYF)
  
• CurrencyShares Mexican Peso Trust (FXM)
• CurrencyShares Russian Ruble Trust (XRU)
• CurrencyShares Swedish Krona Trust (FXS)
• CurrencyShares Swiss Franc Trust (FXF)
  

There are also leveraged funds, which enable investors to maximize the movements of a particular currency. The following funds all double exposure by 200%:

• ProShares Ultra Yen ETF (YCL)
• ProShares UltraShort Yen ETF (YCS)
• ProShares Ultra Euro ETF (ULE)
• ProShares UltraShort Euro ETF (EUO)
• Market Vectors Double Long Euro ETN (URR)
• Market Vectors Double Short Euro ETN (DRR)

In registration include CurrencyShares for Hong Kong, Singapore and South Africa, as well as WisdomTree funds for the Czech koruna, Chilean peso, Israeli Shekel, the Russian ruble and many more.

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

For more stories on currencies, visit our currency ETF category. For more special reports, view our special report page.

After enormous government spending and  constant money printing, most Americans fear that inflation is looming.

Wes Moss for Daily News has some ways to  help hedge it:

1. Oil and Commodities. As the dollar weakens, owning oil related stocks and ETFs/exchange traded notes (ETNs) will be one of the most direct ways to hedge against this. Also, if we do see inflation, chances are that we will be experiencing some economic growth here in the United States. United States Oil (USO), up 19.1% year-to-date.

2. Non-U.S. Currencies. If the U.S. dollar does lose value relative to other currencies, it will be beneficial to have a portion of your investments in those foreign currencies. This can be accomplished by owning the actual currency itself in a brokerage account, or investing in an ETF that tracks a foreign currency. There are an increasing number of these currencies available to investors, including CurrencyShares Euro Trust (FXE) and WisdomTree Dreyfus Chinese Yuan (CYB), up 0.4% and up 2.3% year-to-date, respectively.

3. TIPs/ Bonds. TIPS, or U.S. Treasury Inflation-Protected Securities, are aptly named, as they are designed specifically to pay you a steady yield adjusted to the U.S. Consumer Price Index. iShares Barclays TIPS Bond (TIP), up 2.5% year-to-date.

4. Futures. There are a number of ETFs that trade futures available today – it’s a much simpler route to take for the average investor. PowerShares DB Agriculture (DBA) is just one such ETF that holds futures in corn, wheat, sugar and soybeans. It’s up 4.4% year-to-date. You can find more ETFs that hold futures here.

5. Non-U.S. Stocks. Remember this works both ways: If inflation does not turn out to be a problem here in the United States and the U.S. dollar actually strengthens versus other currencies, your foreign stock investments will suffer. There are dozens of international ETFs that hold non-U.S. stocks – visit the provider’s page to find out the holdings and decide whether they’re right for you.

For more stories on commodities, visit our commodity ETF category.

For full disclosure, Tom Lydon’s clients own shares of TIP.

The U.S. dollar is under attack and there are several factors that are eating away at the dollar’s strength, remarks Ron DeLegge for ETF Guide. The Chinese yuan is being pushed to be included in the IMF’s basket of fund payments for bilateral trades, and the currency may overtake the U.S. dollar as the world’s reserve currency. The U.S. government is also continuing its defacement of the dollar by increasing spending and deficits.

• WisdomTree Dreyfus Chinese Yuan (CYB): up 2.7% year-to-date
• PowerShares DB US Dollar Index Bullish (UUP): down 2.6% year-to-date
• PowerShares DB US Dollar Index Bearish (UDN): up 1.8% year-to-date

How can an investor protect one’s wealth against a falling dollar?

Currency Funds. These types of ETFs let you capitalize on the strength of foreign currencies. Currency ETFs short the dollar to  its corresponding currency. Top-performing Rydex Investments currency ETFs include:

• CurrencyShares Australian Dollar Trust (FXA): up 10.4% year-to-date
• CurrencyShares Canadian Dollar Trust (FXC): up 8.5% year-to-date
• CurrencyShares Mexican Peso Trust (FXM): up 5.9% year-to-date

Hard Assets. These are assets not correlated to the dollar. Such investments include precious metals such as gold and silver. While the physical metals are lovely to look at and lovely to hold, ETFs are also an easy to way to invest in the metals, mainly because they eliminate the hassle of finding and paying for storage.

• SPDR Gold Shares (GLD): up 8.0% year-to-date
• iShares Silver Trust (SLV): up 30.2% year-to-date

International. An investor could also diversify an investment portfolio with foreign ETFs. All international and emerging market stocks and bond ETFs also offer unhedged currency exposure.

• Vanguard FTSE All-World ex-US ETF (VEU): up 9.7% year-to-date
• iShares MSCI Emerging Markets Index (EEM): up 27.2% year-to-date
• SPDR MSCI ACWI (ex-US) (CWI): up 9.2% year-to-date

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

For full disclosure, some of Tom Lydon’s clients own shares of SLV and GLD.

Max Chen contributed to this article.

Early economic indicators for the first quarter are expected to contain positive news with investment flows, demand, credit and loans all increasing, according to Yahoo! News. The hefty cash injection by the Chinese government seems to be working its course and the results are showing.

China is also cutting back on bond purchases with a drop in reserves of $32.6 billion in January, $1.4 billion more in February and a small rise of $41.7 billion in March, reports Keith Bradsher for The New York Times. In the first quarter, China’s foreign reserves grew $7.7 billion, whereas in the same quarter last year its reserves climbed $153.9 billion.

It is estimated that two-thirds of the Central Bank’s $1.95 trillion in foreign reserves are in U.S. securities. Chinese officials worry that American efforts to stir up its economy will result in inflation and devalue American bonds.

As stated on Fox Business yesterday, the Chinese yuan is doing well against foreign currencies and it looks like China may recover faster than its trade partners. A faster recovery could result in increased imports into China, but exports industry may rebound more slowly.

• iShares FTSE/Xinhua China 25 Index (FXI): up 9.5% year-to-date
  

• WisdomTree Dreyfus Chinese Yuan (CYB): up 2.4% year-to-date

Max Chen contributed to this article.

The Federal Reserve said it would expand its balance sheet to include another $750 billion of agency mortgage-backed securities, $100 billion in agency secrities and $300 billion in longer-term Treasury securities over the next six months.

After the announcement, foreign currencies rallied and ultimately brought the rally seen in the U.S. dollar to a grinding halt, leading to its biggest daily drop in more than two decades. Yesterday, the dollar fell 3.8% against the euro and 3.6% against the pound.

The long-term value of the dollar is now being questioned by some officials at Asia’s top think tanks, reports Reuters. Will the dollar remain a key global currency when all is said and done? Asia hopes that any decline in the dollar will be gradual to avoid more shocks to financial systems. For the time being, many market participants believe that the latest stimulus could lead to a prolonged decline in the dollar’s value.

If this is true, we could be looking at upswings in foreign currency ETFs in the near future. Watch the trend lines to see if this bears out, though. Note that these funds have already popped above their 50-day moving averages, and in some cases, the 200-day.

• WisdomTree Chinese Yuan (CYB): up 0.4% in the last week

• WisdomTree Dreyfus Brazilian Real (BZF): up 3.2% in the last week

• CurrencyShares Swedish Krona (FXS): up 9.1% in the last week

• CurrencyShares Swiss Franc (FXF): up 1.2% in the last week