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2014 was supposed to be the year of the dollar, a breakout for the currency. It was a no-brainer—the U.S economy was outperforming developed markets like Europe and even emerging markets like China and India. The Federal Reserve was finally starting the "taper," or the scaling back of the massive, unprecedented amount of easy money that's diluted the dollar's value for the last few years. At the same time, central banks in Japan and Europe are looking to ease further. For all of these reasons, strategists from JPMorgan Chase to Morgan Stanley to UBS predicted 2014 would kick off with a stronger dollar. But so far, the U.S. currency has gone in the opposite direction.

The —a measure of the currency against a basket of its global competitors—is trading below the critical 80 mark, the lowest level since last October. The euro has soared to a seven-week high, and the British pound is hovering at the highest point since August 2009.

And it's not just the strategists that have been wrong. Futures traders also have been trimming their losing bearish bets as the currency has weakened. Speculators have been shorting the dollar, with the value of that short position at $686 million last week, significantly lower than $1.58 billion in the prior week, according to data from the Commodity Futures Trading Commission Why? One factor is the surprisingly lower Treasury yields; the dollar tends to track yields, especially the dollar-Japanese yen trade.