[petp_the_greek]

regarding people buying the CNY...yes, techincally outsiders are not allowed to own the currency...same thing goes for brazil, argentina, south korea, phillipines (and some others)...but that doesnt mean it cant be traded. FX dealers devised a way around it by creating something called a NDF (non-deliverable forward)...basically its just a regular forward contract that automatically unwinds itself a day or two prior to maturity (so you dont take actual delivery of the foreign ccy) and thus settling any gains/losses in USD.
since NDF's are not as liquid as the majors, an alterative way to gain exposure to china (or most exotic asian currencies) is by buying/selling JPY.

and currencies DO have less longterm volatility than say, equities. but the reason youre at such a disadvatage is because of the volume you must trade in order to make any money and the use of leverage. hedge funds doing billion dollar trades are not that uncommon. in order for a retail investor to make decent money they must use ridiculous amounts of leverage...100 times leverage at retail brokers is the norm (compare that to 1.5 times leverage in the stock market)...so any small swing against you will usually wipe you out.