WisdomTree has filed with the SEC to create two new funds that track the change of the American dollar against a basket of world currencies. The new funds will compete with PowerShares US DB Dollar ETF (UUP: Quote, Profile, Advanced Chart, News), which has attracted more than $3 billion from investors.

The WisdomTree Rising Dollar Fund, one of the new funds, will seek to provide performance equivalent to the change in the value of the US dollar against 15 other world currencies. The fund will invest in Treasury bonds, as well as money markets and currency contracts, to derive returns for its investors.

WisdomTree Commodity Currency Fund will seek out currency investments in countries with strong commodity producing industries. The fund is centered on the relative value of the currencies represented by the following countries: Australia, Brazil, Canada, Chile, Indonesia, Mexico, New Zealand, Norway, Russia and South Africa, according to the SEC filing.

The vitality of currency ETFs was long questioned, as only a few were operating with enough assets to cover expenses. However, investors recently have picked up the pace, investing nearly as much in October as the first nine months of 2009 combined.

$548 million was added to currency ETFs in October, pushing the year to date total to $1.2 billion, according to The Street. The incredible gain in invested assets suggests that currencies may soon be a mainstay in the average portfolio, helping to erase currency fluctuations that threaten portfolios that are limited in their geographic diversification.

A shift in investor sentiment towards cash as an asset class, rather than a basic unit, has led investors to seek out foreign diversification against currency risk. Rydex CurrencyShares Australian Dollar Trust (FXA: Quote, Profile, Advanced Chart, News), Rydex CurrencyShares Japanese Yen Trust (FXY: Quote, Profile, Advanced Chart, News), Rydex CurrencyShares Euro Trust (FXE: Quote, Profile, Advanced Chart, News), and Rydex CurrencyShares Canadian Dollar Trust (FXC: Quote, Profile, Advanced Chart, News) provide investors a liquid hedge against foreign currency fluctuations, while the PowerShares US Dollar Index Bearish Fund (UDN: Quote, Profile, Advanced Chart, News) and PowerShares DB US Dollar Index Bullish Fund (UUP: Quote, Profile, Advanced Chart, News) allow opportunities to buy and sell the dollar.

An active central bank in the United States is keeping interest rates so low that traders are now re-entering carry trade positions to profit from the difference in bid and ask interest rates at foreign banks. As rates continue to fall in the United States, carry trade investments in other foreign currencies will only grow more popular and profitable.

Bloomberg reports that between March 20 and April 10, investors could have snapped up an eight percent gain by investing Dollars, Euros and Yen in foreign currencies such as the Brazilian Real, Hungarian Forint, Indonesian Rupiah, South African Rand , New Zealand and Australian Dollars. The recent gain is the best three week growth recorded since 1999.

The carry trade has decreased prices for leading currencies as they are often sold to buy higher yielding currencies in foreign banks. The PowerShares Double US Dollar Index Bullish ETF (UUP: Quote, Profile, Advanced Chart, News) consolidated through March to fall to $25.40 on higher short interest on the US dollar.

Rydex Investments today announced the distribution declarations for seven CurrencyShares exchange traded products: CurrencyShares Australian Dollar Trust (NYSE: FXA), CurrencyShares British Pound Sterling Trust (NYSE: FXB), CurrencyShares Canadian Dollar Trust (NYSE: FXC), CurrencyShares Euro Trust (NYSE: FXE), CurrencyShares Mexican Peso Trust (NYSE: FXM), CurrencyShares Russian Ruble Trust (NYSE: XRU), and CurrencyShares Swedish Krona Trust (NYSE: FXS).

Below is a list of the seven ETFs with their associated distribution. To view a full version of the press release on www.currencyshares.com, click here.

Rydex Investments today announced the distribution declarations for seven CurrencyShares exchange traded products: CurrencyShares Australian Dollar Trust (NYSE: FXA), CurrencyShares British Pound Sterling Trust (NYSE: FXB), CurrencyShares Canadian Dollar Trust (NYSE: FXC), CurrencyShares Euro Trust (NYSE: FXE), CurrencyShares Mexican Peso Trust (NYSE: FXM), CurrencyShares Russian Ruble Trust (NYSE: XRU), and CurrencyShares Swedish Krona Trust (NYSE: FXS).

Below is a list of the seven ETFs with their associated distribution. To view a full version of the press release on www.currencyshares.com, click here.