Selling the dollar is now close to a one-way bet. So great is concern about the health of the US financial system that the dollar traded below Y100 on Thursday, and above $1.56 against the euro. The danger of a dollar rout is rising, and the Federal Reserve, European Central Bank and Japan’s Ministry of Fi­nance should co-ordinate intervention to slow the greenback’s fall.

Aggressive rate cuts and fears that US taxpayers will have to bail out their banks are undermining the dollar. Both make a surge in US inflation more likely, and since the Fed first cut rates last September the risk has been that foreign investors lose confidence, dump assets and trigger a run on the dollar.