As a policy dove, Dudley may "downplay the dots from last week's FOMC," ANZ's Goh said. Still, given Fed Chair Janet Yellen's insistence that the rate outlook is data-dependent, upside surprises in this week's economic indicators - which include existing home sales, durable goods orders and consumer sentiment – may shift the balance in favor of the dollar bulls. "The reality is that the Fed is on data-watch mode," Goh said.
Almost three-quarters of CNBC poll respondents (16 out of 22) believe the U.S. dollar will move higher this week. A little under a fifth - 18 percent (four out of 22) – expect the greenback to decline while 9 percent (two out of 22) said the dollar will trade at around current levels.
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Latest data from IG Markets show client sentiment almost evenly split with 51 percent of their more than 501 clients with open positions betting on a firmer U.S. dollar against the yen while 49 percent expect the cross to fall.
Dollar gains may be relatively muted in the near-term though the consensus view suggests the currency's longer term bull market is intact. "Dollar has additional upside but the easy gains are over," said Ed Ponsi of Barchetta Capital.
The dollar is likely to "consolidate" this week, said Emma Lawson, Senior Currency Strategist at National Australia Bank, although trade may choppy given the risk of "lots Fed speakers likely contradicting each other."