REFILE-BUZZ-COMMENT-Dollar far more likely to rise than fall

Corrects dateline

Jan 31 (Reuters) - The U.S. dollar is far more likely to rise than fall as it is the world's reserve currency which means it has a tendency to gain even if the focus of a risk averse situation stems from the United States.

This is nothing new with the dollar gaining during both good and bad times and whether monetary policy is accommodative or restrictive. Since 2011 the trade-weighted value of the dollar has grown by over 44 percent with the greenback reaching its highest level since 2006 last month.

Unlike 2022 when the greenback was last at a similar level there is no overcrowded investment in the U.S. currency to influence a correction.

The uptrend is technically stretched but that will adjust with time so a deep correction is not likely, and potentially there may be no pullback whatsoever.

The probability of a bigger rise this year is much heightened by repeated threats of tariffs and the precarious state of emerging currencies, many of which have fallen to record lows or toward them, including all of those of the higher profile BRICS nations.

The environment already favours the dollar, and there is risk of a flight to the safety of global reserve currency that could lead to a rapid rise in its value during a disorderly decline in the value of growing number of much less liquid currencies.

The dollar may remain king until a serious contender for the reserve currency crown emerges, and because the most likely challenger is China's yuan which isn't yet fully convertible, there's little cause to fear a change in a year where protectionism is set to support safe assets.

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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own; editing by David Evans)

((jeremy.boulton@thomsonreuters.com))