Richard Nixon’s Treasury secretary, John Connally, famously remarked that “the dollar is our currency, but your problem”. He would be right again now. The rest of the world normally wants a strong dollar. Yet the dollar is now in a bear market. How long might this go on? The plausible answer must be: a while yet.

Since early 2002 the dollar has been on a steep downward path: on JPMorgan’s trade-weighted real exchange rate it has depreciated by 23 per cent since February 2002 (see chart). This is the third such sustained decline since Mr Connally’s remarks. The first was during the early 1970s. The second was from 1985 to 1988. On each of the two previous occasions, the depreciating real exchange rate also helped generate a big adjustment in the balance of payments. This was strikingly true in the 1980s. The same thing is happening again.