The foreign exchange market, or forex, is the largest, most liquid financial market in the world. Investors can easily track currency moves through exchange traded funds (ETFs).
Investors who want exposure to a forex exchange market without dealing with futures or directly with a forex account may be better suited trading in currency ETFs, which cover some of the most popularly traded international currencies.
Related: Currency Hedged ETFs Offer a Smoother Long-Term Ride
Currency ETFs try to reflect the performance of a single currency or a basket of currencies. ETF providers structure their currency funds to try to reflect the movements of a currency in a foreign exchange market by holding foreign currencies directly, foreign currency denominated short-term debt instrument, derivatives or swaps.