BUZZ-COMMENT-U.S. dollar much safer than it was

Feb 26 (Reuters) - The U.S. dollar is much safer than it was when a huge amount of money was invested in it in 2022. That resulted in a sharp but ultimately minor correction that laid the foundation for a resumption of the dollar's long-term appreciation.

The rise which has seen the greenback reach an almost two-decade peak this year has not drawn investors like the rally in 2022, and with much less invested in it, the dollar is far safer now than it was then.

Without the restraint of big investment the dollar is freer to rise further and potentially faster than it did before. At the outset of a trade war that should support safe assets like the global reserve currency, this lack of restraint could result in a rapid appreciation that forces traders to adjust, adding more fuel to the rally.

The correction in 2022 of roughly 23.6%, which was the smallest that could have unfolded, is highly significant as it happened when investment in the greenback was considered overcrowded. A little over two years after this minimal reaction to an extreme situation, the dollar has reached a new major peak.

Unless positioning changes significantly in favour of the U.S. currency, this year's peak could be far exceeded, and for that big change in positions to happen traders must buy many more dollars which will inflate its value.

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