Sometimes obvious predictions turn out to be true. Can the same be said for the US dollar? Seemingly everyone is forecasting its demise. The reasons are simple. In the medium term the US budget is shot and the Federal Reserve’s balance sheet has ballooned out of control. Further out, economic and political power is shifting east, towards China and India. The dollar’s days as the sole reserve currency are numbered.

And – lo! – the dollar is indeed falling. It is now at seven-month lows against the yen and near one-year lows versus the euro. The dollar has performed even worse against currencies considered higher-risk or geared into the global recovery. Some traders forecast dollar parity against the Aussie and Canada’s Loonie before long.