The strong/robust global economic expansion of recent years has been accompanied by extreme international trade imbalances that have worsened/aggravated/deteriorated/exacerbated fluctuations in the US dollar. Too rapid a drop in the currency would be destabilizing. But a gradual dollar fall would help cure imbalances, though only as part of a fuller treatment/solution.
The past week has seen volatile dollar movements/fluctuations. Against the euro, it has fallen by 3 percent, hitting a 20-month low.
The long-term health of the global economy needs a weaker dollar. Put simply, the imbalances are related to excessive reliance across the globe on the rapid growth of demand in the US. The latter has proved to be the only large economy in which demand has consistently grown faster than output. This has provided a sizeable but ultimately unsustainable stimulus to the rest of the world, notably East Asia.