Speculation about the Fed’s next move has been behind most predictions as to the US currency’s possible movements in 2005.

In one of the most recent forecasts, the Citigroup Inc., the world’s biggest financial services company, advises selling the greenback as it contemplates the more aggressive moves by the Fed policymakers as unlikely. The latest rise in the dollar value happened after the Fed raised rates another quarter-point to 2.75, and the more hawkish tone of the statement led many to expect half-point increases later in the year.

``We disagree with this interpretation of the Fed’s statement and disagree with the view that a 50 basis point tightening is more likely,’’ Steven Saywell, chief currency strategist in London at Citigroup, wrote yesterday in a report.

Citigroup cites option prices as evidence that the dollar strengthening will be ``limited and temporary,’’ says the report.

``Market participants appear to want very short-term protection against a dollar rebound, but the lack of demand for medium or longer dated dollar calls suggests that the recent dollar momentum will begin to wane,’’ the report said.

The target price set by Citigroup is at $1.3670 per euro.