Two main factors move currencies: the relative growth of monetary bases and the relative growth of the underlying economies using those currencies. [Chart of the Day: Euro ETFs]
The U.S. dollar is still a reserve currency and is viewed as a safe haven. For the long term, Morningstar analysts are predicting a weak greenback as the United States has current account and budget deficits. [ETFs That Track the U.S. Dollar]
Alternative ETF choices include:
- PowerShares DB G10 Currency Harvest (NYSEArca:DBV)
- WisdomTree Dreyfus Emerging Currency (NYSEArca: CEW)
- WisdomTree Emerging Markets Local Debt (NYSEArca: ELD)
Tisha Guerrero contributed to this article.