Markets are underestimating the risk of a neck-snapping shift in the global financial regime under Donald Trump, with the dollar at its centre.

The US currency has backed down from its post-election high, reaching a two-month low against a basket of other currencies at the start of this week, even despite the latest surprisingly strong inflation data. That is likely to be somewhat soothing for the president, who has spent years railing against what he sees as the corrosive impact on US manufacturing of an overly strong buck.

But by any sensible measure the dollar is still strong. The days when the euro traded steadily around $1.30 and sterling at $1.60 are far behind us — try $1.04 and $1.26 on for size instead. The dollar index has risen some 15 per cent over the past decade.