By Sarupya Ganguly

BENGALURU (Reuters) - A crowded strong U.S. dollar trade is set to get more bunched up in coming months, with near one-third of currency strategists polled by Reuters now expecting the euro to fall to parity with the dollar or below versus only one-fifth last month.

The greenback has been on a rampage since late September, soaring over 7% against a basket of major currencies and hammering the euro down to almost $1.01 on Feb. 3 - just a whisker away from parity, a milestone last hit in November 2022.

Recent data from the U.S. Commodity Futures Trading Commission also showed swathes of speculators piling on "bullish" dollar trade, stretching net-long bets to a near-decade high last month.

That strength will not falter any time soon, according to FX strategists in a Feb. 3-5 Reuters survey, with an 85% majority - 40 of 47 - saying current positioning would hold steady or even see a further increase in net longs by the end of February.

"The view on the dollar is bullish predominantly due to the escalating trade conflict, with our baseline forecast of the euro testing parity in Q1," said Meera Chandan, head of FX at J.P. Morgan.

Chandan added that higher bond yields, robust U.S. economic growth and a still-strong equity market provided additional support to that forecast.

Continued U.S. economic resilience and President Donald Trump's potentially inflationary tariffs and tax-cut policies have put the brakes on market expectations for further Federal Reserve rate cuts, helping lock in the currency's gains.

"Beyond Q1, U.S. exceptionalism will eventually run out of steam which should cause the dollar to weaken over the longer run, but conviction on when this turning point will happen is quite low," Chandan added. 

Some analysts also cited Trump's erratic policy announcements, making forecasting more difficult than usual - year-ahead euro estimates are the most varied since May.

'POLITICAL KRYPTONITE'

"We've seen just how sensitive the market is to headlines every day as the clouds of tariff uncertainty hang over the market. If we do get a trade war and tit-for-tat, then that has negative inflation and growth implications, and inflation right now is political kryptonite," said Alex Cohen, FX strategist at Bank of America.

The latest poll found near one-third of FX strategists - 20 of 66 - seeing euro-dollar tumbling to parity or lower in their three-, six- or 12-month point forecasts - a considerably sharper tilt towards dollar dominance than in a January survey.

The median survey view was for the euro to hold steady over the coming three and six months at $1.03, and strengthen about 2% in the second half of the year to $1.05 at end-January. The weakest euro forecast of $0.97 was also the lowest in two years.

After years of calling for dollar weakness, often incorrectly, analysts have started showing signs of a reversal in the past few months.

Nearly half saw the euro, also hit by expectations for a continued series of European Central Bank rate cuts, trading weaker in the coming six months than they did in the January survey.

Fed policymakers have echoed the need for slower rate cuts, leading interest rate futures to currently price just one more this year, wavering on a second - a far cry from nearly double the amount markets bet on last quarter. 

"We're in a place where the dollar is priced for everything positive, and as long as those things don't change, we're not going to fall back too much. It's going to be very choppy from here - a lot of volatility without necessarily going anywhere," said Dan Tobon, head of G10 FX at Citi.

"Markets won't really pull back too deeply on the dollar now - we still have tariff risks for the next couple of months and U.S. growth outperformance should keep the Fed relatively more hawkishly priced compared to other major central banks."

(Other stories from the Reuters February foreign exchange poll)