Dollar bulls retreat as risks dominate calendar

NEW YORK — Heading into a week of top tier Federal Reserve speakers, traders in the $5.1 trillion-aday currency market see little upside for the dollar.

Risks outweigh reasons for optimism, say investors and analysts, who will be monitoring policy makers including Fed Chair Janet Yellen for signs that their commitment to raising interest rates a third time this year is wavering in the face of disappointing economic data and dialed-back inflation expectations.

“Any surprises to the downside open up the door for another meaningful sell-off,” said Paresh Upadhyaya, director of currency strategy in Boston at Pioneer Investments, which oversees more than $200 billion of assets. “There’s a much bigger risk of a sharp dollar sell-off than for a sharp rally.”

The downbeat tone comes as

Any surprises to the downside open up the door for another meaningful sell-off Paresh Upadhyaya, director of currency strategy at Pioneer Investments

no shock to analysts at Goldman Sachs Group, who wrote in a report on Friday that broad negative sentiment toward the dollar this year is prompting large selloffs in the currency even on small negative surprises, while gains on better-than-expected data have been limited.

Hedge funds and other large speculators appear to be taking note. They’ve scaled back net bullish wagers on the greenback in the futures market to just 43,101 contracts, Commodity Futures Trading Commission data released Friday show. That’s just off last week’s low for the year and compares to over 300,000 contracts in January. — Bloomberg