Dollar strengthened its net position over the course of the day on a number of factors all stemming from one single issue: risk aversion.

The automakers bail out was the banner headline maker of the weekend but now that the celebrations have died off, the grim reality that it all may be in vain sets in. GM stock was mullered yesterday and the price of insuring against a bond default by the company rose by 2%. The company has until March 31st to get its house in order under the terms and conditions of the Federal loan, the worry is that by then the last one out will be turning off the lights.

Falls on oil markets also allowed dollar to strengthen as reports showed that Chinese imports of the black stuff have fallen dramatically over the past 3 months. Chinese growth is said to fall to around 5.5% in 2009 hampering the return of oil prices to OPEC’s target of $70 a barrel. The news that Toyota are due to make their first loss in history also did nothing for global risk sentiment.

Although most people today will be running around with their heads on fire in the vain search for star anise or that present for your obnoxious nephew the World First office will be a bastion of calm. GDP figures for the UK are due today and could finally signal that we are in a technical recession, while the US release should also show that the picture has deteriorated further.

Please feel free to contact me (jeremy.cook@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar. If you would like to discuss your foreign exchange requirements, please contact our:

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Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgement. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.

Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts. E&OE. Definitions of jargon/market terms can be found in our Glossary of Foreign Exchange Terms.