Dollar bulls are betting the Federal Reserve will start cutting stimulus measures as early as this week, CNBC's latest poll of currency traders, analysts and strategists showed.
The Fed may reduce the monthly pace of bond purchases by between $5 billion and $10 billion at its policy-setting this week - Chairman Ben Bernanke's last before his term expires at the end of January 2014 - as recent data suggests that the economy is gaining momentum.
"Mr. Bernanke is desperate to begin taper on his watch," said Scott Nations, President and Chief Investment Officer at NationsShares. Nations expects a "mini" taper at this week's meeting with the Fed announcing a cut in bond purchases by $5 billion a month.
(Read more: Westpac's contrarian view calls no taper in 2014)
Exactly half the respondents (13 out of 26) believe the U.S. dollar will extend gains this week - primarily against the Japanese yen - reflecting expectations that the Fed will signal -or even implement - the scaling-back of $85 billion a month bond purchase program as the economy improves.
Meanwhile, a Nomura client survey published last week showed a 37 percent possibility of tapering at this week's meeting of the Federal Open Market Committee (FOMC), which was "higher than we were expecting."
Ray Attrill, global co-head of foreign-exchange strategy at National Australia Bank in Sydney puts the odds on a December taper at 65 percent and expects the Fed to cut bond purchases by $10 billion if it does act – a scenario that he believes is well-priced into the U.S. dollar. "I don't think the dollar will get much of a lift beyond knee-jerk gains on the day and that we could be lower on the week."