By Saumya Vaishampayan 

Many of the trades that seemed sure bets at the start of 2017 have already flopped in the first quarter.

Investors' high expectations about what President Donald Trump would be able to achieve in office, reflected in the "Trump trade," have moderated. In addition, trades have been upended by surprisingly good global economic data. The Eurekahedge Macro Hedge Fund Index, which shows the performance of funds that wager on big economic trends, has returned 0.5% so far this year, versus 3.4% in all of 2016.

"There's been quite a shift in sentiment about what the U.S. administration will do," said Mitul Kotecha, head of Asia macro strategy at Barclays in Singapore.

Here are five of the trades that seemed obvious on Jan. 1 but aren't working out:

The bet: The U.S. dollar would soar as the Federal Reserve continued to raise short-term interest rates before the rest of the world, while fiscal stimulus and tax cuts could bolster economic growth and encourage Fed officials to lift rates even faster.

What happened: The ICE Dollar Index, which gauges the greenback against six other currencies including the euro and yen, has fallen 2.4% this year. With congressional Republicans divided, the Trump administration's policies such as tax reform and greater infrastructure spending may not come until later this year at the earliest, which is denting the dollar's rally.

The Fed continues to forecast a total of three rate increases this year. But upbeat economic growth elsewhere, such as in the eurozone, suggests that other major central banks could start tightening monetary policy sooner than previously expected, narrowing the interest-rate gap between the U.S. and rest of the world--a trend that would be dollar bearish.

The bet: Currencies of export-sensitive countries such as South Korea would tumble as U.S. trade policy turned protectionist, with punitive tariffs like those mentioned by Mr. Trump on the campaign trail hitting the economic growth of big exporting nations. The Korean won, often seen as a barometer of global trade, could bear the brunt of the selling.

What happened: The won has surged more than 8% this year. The Trump administration hasn't enacted major new tariffs or taken symbolic actions such as naming a trading partner a currency manipulator. Meanwhile, South Korean exports have risen for four straight months as economic growth in Asia has improved--jumping 20% in February, the biggest rise in five years.

The bet: The Chinese yuan would decline as capital outflows continued and the economy cooled.

What happened: The yuan has advanced 0.7% against the dollar this year. Part of the move is driven by the dollar's pullback. But China has clamped down on the flood of money leaving its borders. Its foreign-exchange reserves rose in February for the first time in eight months. Stability is one of the Chinese government's goals for the year, and as such, the central bank was quick to squash bets on further yuan declines in the offshore market at the start of the year. Another tailwind: China's economy has held steady this year.

The bet: Stocks, bonds and currencies in emerging markets would fall as the Fed raised rates, boosting the appeal of safer U.S. assets. Also, a strong greenback would make dollar-denominated debt in those countries more expensive to repay, a potential drag on those economies.

What happened: The Fed has stuck to its cautious approach to raising interest rates, meaning that returns in some high-yielding emerging markets continue to look alluring. Foreign investors poured $7.2 billion into emerging-market stocks in Asia, excluding China, in the first two months of the year, according to ANZ Research. Those investors also sent $7.7 billion into the region's bonds. Improving emerging-market growth has also helped: Capital Economics estimated in late February that emerging-market economies were growing at their fastest pace in almost three years.

The bet: Oil prices wouldn't tumble and may even rise above $60 a barrel following a late-2016 deal among major producers to curb production.

What happened: U.S. crude oil has dropped nearly 10% this year as investors weren't convinced that major oil producers would continue to curb their output through year-end. Additionally, U.S. production of crude oil has been increasing since the start of the year. A global glut of crude was a major driver of the slump in oil prices that started in the summer of 2014.

Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com

(END) Dow Jones Newswires

March 29, 2017 06:13 ET (10:13 GMT)