Lawrence Summers, the director of President Barack Obama’s National Economic Council, has voiced his support this week for “a strong dollar based on strong fundamentals”. He was responding to the greenback’s recent feebleness: the US currency has depreciated by 13.3 per cent on a trade-weighted basis since its peak in March of this year. But this fall in value, while large, should neither be feared nor obstructed.

The immediate cause of this slide is not growing fear of inflation: market expectations for future inflation rates have been stable and low. Rather the decline in the dollar has been caused by the recent recovery in world economic confidence.