The fast and furious rise of the US dollar has sparked worries about the pain that is likely to inflicted on weaker economies, and the risk of a currency shock as capital flows out of emerging markets.

Societe Generale head of global economics Michala Marcussen said in her latest research note that a significant appreciation of the [US] dollar … "would be consistent with much weaker growth elsewhere.

Since the start of this year, the Australian dollar has fallen nearly 2 per cent against the greenback. Credit:Christopher Pearce

"In such a scenario, [it] would equate to further capital outflows, placing further pressure on already vulnerable economies.

She added that "the paradox is thus that a [US] strong dollar tantrum could be a more worrying scenario" than a "tightening tantrum", which might play out as the US Federal Reserve raises interest rates.