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Just when investors thought they’d finally made a good call in the currency market, the dollar’s advance messed it up.

The U.S. currency on Friday capped its best week all year versus its major peers, shortly after hedge funds finally switched to betting on dollar declines, known as going short. That’s not the only wrong move foreign-exchange managers have made this year—an index tracking their returns shows they’ve failed to turn a profit in 2016.

"There's a lot of uncertainty about the strength of U.S. growth; there's still a lot of risk expectation built around China, and those two forces working against each other means we don't have a strong trend." --Philip Moffitt, Goldman SachsMany of the assumptions traders made at the start of the year turned out to be misguided. Anticipated Federal Reserve interest-rate increases have failed to materialize, creating less policy divergence between the U.S. and its counterparts. And though investors were right to speculate the pound would tumble in the run-up to next month’s European Union referendum, it’s recovered since.

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