Currency trading has surged among individual investors the last few years. We’ve come a long way since the US abandoned the gold standard in favor of a free-floating dollar back in 1971. This helped establish a foreign exchange market, or forex, where the world’s major currencies were traded between banks and other institutions. Now, seeing the infomercials and hype-laden websites, many investors have flocked to the foreign exchange market.

The problem with forex trading is its uniqueness. Just as the futures market is unlike stocks, forex is a different species. Most investors don’t want to learn a new trading platform, decipher the forex glossary, or otherwise scale a formidable learning curve. That’s one reason why currency ETFs have taken off in recent years. Investors want to trade currencies on a familiar platform. With currency ETFs, investors can enjoy the benefits of the foreign exchange market without an actual forex account.

Enter Europe’s sovereign debt crisis. Debt burdens in some of the continent’s smaller economies are straining the dreams of unity. The European Central Bank’s (ECB) recent €750 billion ($931 billion) rescue package was designed to stop Greece and other countries from defaulting on their debt. At first blush, the markets liked the effort, but the optimistic headlines were soon replaced with other more depressing news.

Investors see two major issues. For one, the problems that brought Europe’s weaker economies to the crisis have not abated. Many governments still can’t pay for their own programs. When Greece implemented drastic service cuts, rioters took to the streets throwing petrol bombs and clashing with police. Even after such social instability, the ECB efforts may still not be enough.

The second problem is the breadth of the issue. Like Greece, Spain is now teetering and could need more ECB cash to meet credit obligations. Investors don’t like instability, and bondholders don’t like missed payments. Both conditions seem to be spreading.

As a result, the Euro currency has taken a beating. Since early-December 2009, the Euro is off 19% against the dollar. The fall accelerated this month. The question now is two-fold. If it continues to fall, how much further will it go? On the other hand, if the Euro turns around, will it revert to recent trading ranges? The ECB may want a weaker Euro for exports, but the Federal Reserve may like a weaker dollar to help a battered US economy. Which way should you go?

If you’re convinced the Euro’s best days are ahead – at least in the near term – you might consider ProShares Ultra Euro (ULE), an ETF that mimics the EUR/USD forex pair. You want to buy ULE if you expect the Euro to appreciate. However, if you think the Euro is heading down even more, take a look at ProShares UltraShort Euro (EUO). This gives you the equivalent of a short position in the Euro. Both ULE and EUO offer 2x daily leverage to their respective benchmarks.

One thing seems certain. Until the fires go out in Greece, Spain gets a bailout, or the debt crisis is over, expect more volatility for the Euro.