Currency fluctuations can be problematic for investors. If not hedged properly, gains in one part of a portfolio can be lost by the down cycles within currency values in another part of the portfolio. Investors in the US, for example, see this issue all the time with global or non-US investments eating into profit that had been realized at the US dollar level.
Exchange Traded Funds (ETFs) often use certain tactics to help investors reduce foreign exchange risk and provide an offsetting short position in the foreign currency to match the total notional principal of the underlying portfolio, typically through the use of a forward or a futures contract. A forward allows an investor to lock in the price of a currency today, regardless of fluctuations.