UBS in a Thursday note said that the dollar would likely peak in the next few months.
In addition to likely disappointment around Trump policies, "we think it's a broad-based recovery of all other currencies relative to the U.S. dollar," said Thomas Flury, global head currency strategy at UBS Chief Investment Office.
He expects rising inflation and a more restrictive monetary policy in Europe to support the euro, while stabilizing oil prices should help oil producing countries such as Canada see strength in their currencies versus the dollar this year.
The Trump administration may also prefer a softer U.S. dollar.
"Definitely, Trump has been emphasizing export-oriented policies. This is not consistent with a strong dollar," Vamvakidis said. Dollar strength makes U.S-produced goods more expensive for foreign buyers.
The U.S. dollar index is tracking for its third negative week in four after hitting a 14-year high at the start of the year.
"I don't think it's a change of the trend. For now we have to wait to see what Trump is going to do in the months ahead," Vamvakidis said. He said the dollar's decline this week was "not surprising and definitely not a major setback for the dollar rally."
Bank of America forecasts the euro to weaken to $1.02 versus the dollar by the middle of this year, and the yen to weaken to 120 yen versus the dollar by the end of the year.
Barclays' Jaime generally expects the dollar to strengthen against other major world currencies, such as the Japanese yen. "If the next rally of the dollar comes from restrictive trade policy, we think [emerging market currencies] would be the one that comes under pressure," he said.