Euro Currency Trust (FXE), and EFT of Euro currency http://finance.yahoo.com/q?s=fxe , has been traded since this year. Here is one interesting comment about it http://yahoo.smartmoney.com/etffocus/index.cfm?story=20060621&afl=yahoo : "Once you enter a derivative like an ETF, you lose liquidity," says Ward. "If the market starts tanking and you want out, who will be there to buy your position? In the spot market you always have a buyer and seller because many players need the currencies to transact international business." How about your votes/ comments?
Ward is an idiot. There's never any guarantee that there will be liquidity in any type of market. Of course, the spot-FX market will tend to have the best liquidity for foreign exchange trading. These foreign exchange ETF's should be thought of as a vehicle for retail participation which will ultimately be hedged in the spot market. Their trading volume should be insignificant when compared to the spot-market. They should be better than trading through a "bucket shop". We'll see what happens.
Perhaps they need very good marker makers for individual products to make them working better for liquidity purpose. Options availability of them might be helpful, imo.