Streible: The dollar index is in a bear market

Market Trends & Analysis - The dollar index has been in a bear market since peaking on January 1st at 110 and February 3rd at 10975, characterized by a series of lower highs and lower lows [2] - Technically, the dollar index needs to surpass 9936 to establish a neutral trend, with potential resistance around 100 [2] - Political uncertainty, tariff headlines, and speculation of US authorities favoring a weaker currency are fueling a rotation away from the dollar [3] Currency Composition & Reserve Rotation - The dollar's composition in foreign exchange reserves has decreased from approximately 71% in 2001 to about 57% in 2025 [4][5] - Central banks are rotating out of the dollar due to concerns about the unsustainable US fiscal trajectory, despite low default risk [5] - Central banks are diversifying their reserves by adding gold and other asset classes [6] Impact Factors & Future Outlook - The Federal Reserve's uncertainty regarding spending measures and geopolitical factors necessitates holding higher rates for longer [7] - Uncertainty surrounding the "big beautiful bill," Middle East conflict, and tariffs are holding back the dollar's rally [7] - Clarity on these issues is needed for the dollar index to potentially resume its rally [7]