When a currency rises after government officials say that it should, you learn one thing: that the fundamentals were pushing it up anyway. It makes sense for senior US and European officials to talk up the dollar against the euro – as they did this week in the Financial Times – especially now that optimism about the US economy makes their arguments plausible. In the long run, however, the real risk of a dollar crisis is against the managed currencies of Asia and the Middle East.

Early March was a time of danger for the dollar. There were forecasts of a deep depression, liquidity fears around some of the mightiest banks on Wall Street, and the dollar’s decline against the euro, already rapid, began to accelerate. That decline could have become self-sustaining if investors had begun to dump US assets, but the decisive rescue of Bear Stearns by the Federal Reserve shifted expectations about future US interest rates and restored confidence.