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Tickers in this Article: FXS, FXF, UDN
Getting onto a seesaw at a children's park with no one on the other side sends the thrill-seeker's side quickly into the ground while vaulting the other vacant side straight towards the sky. In terms of the global economy, the U.S. is the weight that has dropped and baskets of foreign currencies have moved higher. For investors who are not inclined to become Forex traders, but who still desire to be informed of how foreign currencies have performed the following exchange-traded funds (ETFs) have been standouts since the beginning of the year.

CurrencyShares ETFs
Each of the CurrencyShares ETFs is designed as a trust to track the price of the underlying currency (net of trust expenses). Expenses are expected to be paid from the interest earned on the deposited currency. (Learn more on these ETFs, and others, in our Exchange-Traded Funds (ETFs) tutorial.)

CurrencyShares Swedish Krona Trust ETF (AMES:FXS)
Sweden's inflation rate rose to a 15-year high of 4.3% last month. As oil pushed higher into record territory over the past few weeks Sweden has followed the lead of the European Central Bank by raising its key lending rate to 4.5%. Higher interest rates make the countries currency more appealing since investors can earn a greater rate of return on an investment in that currency. Year-to-date FXS is up 7.5%.

CurrencyShares Swiss Franc Trust ETF (AMEX:FXF)
Inflation in Switzerland as a result of higher energy costs is putting increasing focus on the Swiss central bank to keep its key interest rates near a 2% ceiling. Swiss officials are also fearful of wage inflation driven by demands from its labor markets. Year-to-Date FXF is up 10%.

PowerShares DB US Dollar Index Bearish (AMEX:UDN)
The US Dollar Index has been trading around a $72 support level since the middle of March. Against climbing oil prices, falling interest rates and the threat of inflation mixed with slowing growth in the U.S., the upward resurgence of the U.S. dollar is uncertain. The UDN ETF rises when the U.S. dollar index sinks, also known as an inverse ETF. Year-to-Date UDN is up nearly 7%.

Conclusion
Chasing performance can be a treacherous game plan. While having an opinion on the direction of currencies is important, no one ever truly knows their future direction 100% of the time. The ETFs mentioned began to outperform the S&P 500 once the market began to fall from its peak in October 2007. Investors must stay aware of a correction in the opposite direction that could cancel these recent gains. The point is for investors to remember there's always a counter-weight no matter how heavy their side of the seesaw.

For further reading, be sure to read An Inside Look At ETF Construction, to help understand how and why this investment product works.

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