PowerShares CurrencyShares Euro Trust (FXE) is an exchange-traded fund (ETF) that allows investors to invest easily in the euro as a currency.
This fund can be a useful tool for would-be currency speculators who expect the euro to rise. Interestingly, the fund recently moved from Guggenheim to Invesco, which now manages it as part of its CurrencyShares fund line.
The mechanism by which this fund operates is simple. The fund is fully invested in cash in euro form. Owning shares in this fund as an investor is a lot like heading to a currency exchange and swapping some dollars for euros. But buying shares in the fund is more convenient and potentially has less of a fee attached.
Currently, 19 European countries use the euro as their joint currency. The value of the euro is influenced by European economies, as well as the policies of the European Central Bank (ECB) and individual European governments.