USD Bear Market Accelerates: Major Pairs Eye Multi-Month Highs

The US dollar index (DXY) has declined 2.8% year-to-date, extending losses across major forex pairs after years of sustained appreciation. Scotiabank analysts predict this represents the early stages of a prolonged dollar bear market, citing shifting Federal Reserve policy expectations and improving global growth dynamics. EUR/USD has gained 3.2% to trade near 1.0950, while GBP/USD advanced 2.5% toward 1.2800. The weakening trend accelerated after recent US economic data showed moderating inflation and softer labor market conditions, reducing expectations for aggressive Fed tightening. Technical indicators suggest DXY support at 101.50 is vulnerable, with a break potentially triggering moves toward the 100.00 psychological level. Currency strategists highlight that positioning data shows speculators reducing dollar longs, indicating momentum shift. For forex traders, this environment favors long positions in major pairs against USD, particularly on pullbacks to key support levels.