BUZZ-COMMENT-High for longer US rate outlook favours unfancied dollar

Feb 12 (Reuters) - The U.S. interest rate is seen little changed from the current mid-point of the 4.25-4.5% target range both this year and next, providing support for the dollar that relatively few traders and investors have been prepared to buy.

Futures suggest the U.S. interest rate won't drop below 4% during a period when many other nations are expected to lower their rates significantly.

This will underpin the dollar, which as the global reserve currency should also draw support from a trade dispute that has only just begun.

The dollar, which reached an almost 20-year high on a trade-weighted basis in January, is also entrenched in a steep uptrend that has endured for around 14 years.

Despite this abundance of support the most recent Reuters poll for Asian FX revealed no significant bet in favour of the dollar, while CFTC data shows just one big wager is held versus Canada's dollar.

Canada is at the heart of worries surrounding U.S. trade policies so that singular wager comes as no surprise, but other betting certainly does.

Speculators are currently gambling that Mexico's peso will rise and have also bet that the dollar will drop against the yen and Brazilian real.

Almost nothing is wagered against the pound, while bets against the euro, which are about one quarter of the record short, have recently been reduced. Yet this year EUR/USD has decisively broken down from the range traded throughout 2023 and 2024.

The dollar is far freer to rise than it was when it peaked due to overcrowded positioning in 2022, and has recently exceeded 2022's high.

The dollar, which is liquid, safe and supported by a relatively high interest rate that looks set to remain stable for a long time, may continue to rise.

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