When Alan Greenspan told Congress in 2002 that “there may be more forecasting of exchange rates, with less success, than almost any other economic variable”, foreign exchange strategists were not amused. After 2011, they may admit that the former Federal?Reserve?chairman?had?a?point.

This was a year in which the euro largely defied the growing sense of impending disaster hanging over the eurozone, even as funds flooded into Switzerland, forcing its central bank to stop the franc’s rapid rally dead. Momentum traders hurt by that had already been bloodied by Japan, which intervened on a scale not seen since 2004 to stem the yen’s rally. This has also been the year where the market’s favourite long-term bet – China’s strengthening renminbi – faltered . Other former emerging market darlings were also among the poorest performers, notably Brazil and Mexico (down 11 per cent on the dollar, or 7 and 8 per cent respectively versus the euro).

The dollar was, however, the biggest gainer; as the eurozone’s woes increased, funds around the world flooded back to the haven of the US. Measured against a trade weighted basket of currencies, the dollar recently broke above its 200-day moving average. The last two times it did this coincided with periods of high market stress: the post-Lehman turmoil and the run-up to Greece’s first bail-out. Whether the recent break is a harbinger of trouble will dominate debate in the short term.