Is America going to suffer chronic inflation or deflation? Depends on who you ask. Opinions are divided over the direction of the stock market and for bonds. Nearly everyone, however, seems to be bearish on the dollar over the long term. This year, however, its movements have pretty consistently moved in relation to investors' appetite for risk. When data suggested the world was slowly moving out of recession, the dollar sold off. On days when after-shocks from the crisis wobbled markets, the dollar rallied.

That makes Friday's jump on the back of a way-better-than-expected payrolls report worth noting. The dollar popped almost 2 cents to 1.48 against the euro with a similar rise versus the yen. So is good news now positive for the dollar? It could well be. The long term arguments for being short are based on public deficits and the threat of inflation. A steeper growth trajectory, while not alleviating the latter concern, would help the government service its debts more easily. And if the economy actually starts adding jobs soon, the US would become the poster-boy of the global recovery. A sharp pick-up also threatens the shorter-term reason to dislike the dollar: near zero interest rates.

There is no question that an obvious carry trade emerged once the Federal Reserve more-or-less promised to keep policy rates low indefinitely. Borrowing cheaply in dollars was especially attractive given the investment opportunities in frothy emerging markets. By contrast, the thinking of those reading the dollar's last rites was muddled. Currencies are relative. If the dollar is going to fall, what against? The eurozone has many of the same problems as the US and its currency is already fraying round the edges. Japan's government has almost twice the debt relative to output as America. Emerging countries have yet to prove themselves over the long haul and many look a little hot. As Friday's jobs number shows, investors write off Uncle Sam at their peril.