BUZZ-COMMENT-This may not be a turning point for the dollar, but worth consideration

Feb 28 (Reuters) - This may not be a turning point for dollar, but the idea is worth consideration due to the dip in its value against expectation, and the prospect that OPEC policy leads to a more extensive easing cycle in the United States.

In a little over a month the dollar index has shed roughly 4% of the 10% gain that was fuelled by worries about a trade war, and it has done so after feared tariffs have been imposed.

While delays to some tariffs have spurred more selling, the backdrop of a trade dispute should be underpinning the dollar, and not undermining it. But flows into yen, gold, Swiss franc and the euro suggest investors are seeking shelter anywhere other than the global reserve currency.

This might prove to be folly as while the U.S. currency is the world's reserve, it probably won't fall far, and may well continue the long-term rally that's led to a 44 perccnt appreciation in the greenback's valie since 2011.

The Organization of the Petroleum Exporting Countries and its allies effectively include BRICS nations - could have a big say in the near term, should they increase supply when crude is testing a level of crucial significance. A hike in supply that drives oil below $70 per barrel, suppressing inflation during an easing cycle, could allow the Federal Reserve to lower the U.S. interest rate further and faster and deal the dollar a lot of damage.

All the nations of major traded currencies (EUR, GBP, JPY and CHF) import oil, as do those of the most popularly traded Asian currencies (CNY, INR, THB), while the U.S. is among the biggest exporters.

Until China floats the yuan, which could lay the foundation for it to ultimately challenge the dollar's reserve status, the dollar may not undergo a major change in fortune. But its drop could be a lot more extensive if oil producers open the taps.

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