Keen sport watchers will have witnessed the use of ‘head-fakes’ to deceive an unsuspecting opponent. Indeed, the phrase is used generally to describe not only using a fake move with one’s head to wrong-foot opponents, but legs, arms and even – with the head remaining motionless – one’s eyes. Whether one considers such behaviour unsporting gamesmanship or perfectly legitimate often turns on whether it is performed by or against ‘our team’ or ‘our player’.

It is with head-fakes in mind that I wish to consider the recent and seemingly ‘unstoppable’ near waterfront rise in the dollar.

The reality at the moment is that whether we consider the dollar’s level against a trade-weighted basket of other currencies or its level against a basket of commodities, what we have witnessed is dollar strength; after all, very recent falls in commodity prices have per se equated to just that. As to why we have seen it move upwards in practically all dimensions – the rouble a remarkable exception – there are a host of explanations, many connected. There is for one, the time-honoured surge in the dollar which happens with a hawkish shift in Fed policy. Under such circumstances we see a flooding back of those hitherto cheap-to-fund dollars which had journeyed overseas in search of yield arbitrage. Another force lifting the dollar is its perceived safe-haven status; ‘safe-haven’ when there are concerns over global economic growth and/or global geo-politics. Since we are in a period when we cannot be sure what awaits us economically or militarily, can one be surprised by the rise in the dollar? Well, I for one will not be taken in by this head-fake. As to when others realise they have been taken in, the table below provides 10 possible wake-up calls.