The euro is showing all the signs of strain of being the new international key currency. Manufacturers in Europe complain that its rise is imposing new levels of pain. Politicians in many countries across Europe are pressing to have more influence on monetary policy. For many of their constituents, the euro has become one of the whipping boys of globalisation. The euro is a much younger currency than the dollar was in 1944 and it exists in a political environment in which the governance structures for the new currency are not clearly defined. That makes the internal stakes within Europe much higher.

Yet the external, geopolitical stakes of currency shifts are high too. Unlike Britain in the aftermath of the second world war, the US remains indisputably the world's only superpower. It will resent what it will call the deflationary impact of the Europeans and deploy a formidable arsenal of diplomatic powers to defend the status of the dollar.

In 1944 the dollar became the world's key currency because the US was both the world's leading economic and military power. In 2008, the European Union has many economic advantages but also substantial political vulnerabilities. It is not easy being the world's main currency. It is even possible that the new strains might lead to the break-up of the monetary union.

So:

• European manufacturers are unhappy (true, but Eurozone exports are still at a record high);

• the US is unhappy, and will use a 'formidable arsenal' to change that (but the main weapon in the arsenal is Europe's apparently endless willingness to bend over);