Economic growth in China for 2007 is expected to be reported around the 11.5% mark, with much of that growth coming from cashed up exporters who have invested money into chinese assets.

Beijing is becoming increasingly concerned about domestic inflation, and for good reason, with an 11 year high hit in November 2007. Regulators are concerned that too much money in the financial system is causing the economy to overheat. With cheap Chinese exports far outweighing expensive imports, experts argue that an undervalued exchange rate is the cause of the excess liquidity problem.

Experts hope that appreciation in the Chinese currency and depreciation of the U.S. dollar will help cool demands for cheap Chinese exports while giving the Chinese consumer greater buying power to purchase expensive imports. The appreciation of the Chinese currency will also help international Chinese firms buy assets overseas more cheaply.

The appreciation in the Chinese currency will cause difficulties for some businesses who may be forced to switch their core business of exporting to importing. The depreciation in the U.S. dollar is also causing trouble for some businesses who are forced to complete business transactions in U.S. dollars, with businesses forced to offload U.S. dollars quickly as it’s considered safer to keep your money in yuan.

Obviously with $1.2 trillion being traded, the forex market is extremely liquid. This means that with a click of your mouse you can immediately buy and sell forex at the prevailing rate. You will never be caught holding currency you need to sell.

With the invention of the internet, trading forex has never been easier. As forex is such a highly traded market, there are a lot of brokers to choose from, offering various rates of commission (also referred to as spread) and trading platforms with different features. Most platforms will allow you to pre-enter buy and sell orders at your preferred price, along with stop loss (to minimize your loss if the trade goes against you) and profit target. Many firms also offer free ‘demo’ accounts. A demo account will allow you to practise your trading skills with virtual money before you put any real money at risk. Most brokers also offer real-time charts for forex and popular technical analysis tools.

A large advantage of trading forex is the amount of leverage that can be used with some firms offering as much as 200 to 1 leverage, allowing you to place a $10,000 trade with a $50 margin. The use of leverage can assist those with limited funds to trade large quantities on the forex market. A large number of brokers also offer ‘mini’ accounts allowing traders to place much smaller trades than standard accounts.

Forex trading also has the advantage that you can trade both sides of the market, you are able to enter trades both LONG (anticipating the market will go up) and SHORT (anticipating the market will go down).

The forex market is open 24 hours, closed only from Friday evening to Sunday evening. This means you will never be caught with opening/closing gap problems. The fact that the forex market is open 24 hours makes it a more accessible market for part-time traders as trades can be placed at a time that is practical for you.