From the viewpoint of what types of situation might give rise to disruptive exchange rate movements, a currency that is overvalued, or a balance of payments deficit that is so large as to be unsustainable, can give rise to rapid exchange rate movements. One example is the current account deficit of the United States in recent years.
There was no exchange rate manipulation; nonetheless by most measures the currency was overvalued. Possibly the overvaluation could be offset – though not fully, so long as other countries maintained their dollar pegs – through fiscal policy, thereby reducing the underlying threat to stability of the global exchange rate system.