Check out PowerShares DB G10 Currency Harvest Fund (Amex: DBV). DBV uses currency futures contracts to exploit the trend that currencies with relatively high interest rates, on average, tend to rise in value relative to currencies with relatively low interest rates.
Specifically, the fund takes long positions in the 3 highest yielding currencies of the G10 and shorts the 3 G10 currencies with the lowest yields. The G10 currencies include U.S. Dollars, Euros, Japanese Yen, Canadian Dollars, Swiss Francs, British Pounds, Australian Dollars, New Zealand Dollars, Norwegian Krone and Swedish Krona.
This approach is actually an arbitrage strategy based on an economic theory regarding the correct price of a currency future known as the Interest Rate Parity formula. Since it is an arbitrage play (i.e. betting that market mispricings will correct themselves over time), DBV can be part of a long term diversified investment strategy without worrying about things like whether or not dollar will continue to fall.
Playing this strategy back over time, the simulated performance of the index was impressive – see the prospectus for more information on the strategy.
See the Powershares website for more information on DBV. Consult with your financial advisor on including currency exposure in your portfolio and check with your tax advisor on the tax treatment of DBV.