eurozone wars
At risk of getting derivative John Quiggan has picked this up:

The real issues are subtler and relate to the complex relationship between military power, economic power and the ?soft power? of cultural and diplomatic influence. A successful outcome in Iraq may be seen as reinforcing US hegemony and therefore increasing the willingness of market participants, including central banks, to take actions that reduce their own returns but bolster the status of the dollar as a reserve currency.

Taken as a whole, I would argue the Iraqi war has done the opposite. The effect has been to make the US appear dangerous and unpredictable and to increase the desire of most people and governments to constrain its hegemonic power. Moreover, Bush?s willingness to spend vast amounts on war while making yet more dramatic cuts in taxes has strengthened the perception that US debts will sooner or later be repudiated either directly or through inflation.

However, this is not the view in Washington, where military and economic power are still seen as going hand in hand. It?s clear that, in the minds of those formulating US policy, military victories achieved in the face of European opposition will pave the way for continued US economic dominance.

Thus far, the foreign exchange markets don?t seem to agree. Although the $US is still well above its fundamental value, it has declined steadily during the Iraq war, with little regard for whether the war news is good or bad.

It will be interesting over the next few months to watch what happens to the 'hegemonic premium', the difference between the market value and the fundamental value of the US dollar.