BUZZ-COMMENT-Shunning world reserve currency making it more attractive

Feb 11 (Reuters) - In the midst of a trade dispute, traders are shunning the world reserve currency to purchase riskier assets that are undermined by monetary policy, unlike the greenback which is supported by an interest rate that is unlikely to change much in the next 12 months.

Traders have purchased gold that is costly to store, the yen which is undermined by the loosest monetary policy, and Swiss franc, the rise of which the nation's central bank constantly battles to prevent.

They have even favoured the pound which isn't safe and is undermined by a falling interest rate.

As a result, gold has boomed to a record high, and the yen, euro and pound have recently outperformed the greenback, in the midst of a trade dispute that has the capacity to create a great deal more turmoil.

Tariffs and delayed tariffs have swiftly been followed by threats of more to come, and should these result in concessions that favour the United Sates, this policy will surely be repeated with nations under threat eventually fighting back.

China, which has more capacity to push back, has already done so, and while stocks have thus far proved resilient, the rallies for major indexes are stretched and would benefit from a reset that would favour their long term appreciation.

Even minor corrections could result in a surge in risk averse behaviour that results in a rapid rise in the dollar's value, should investors turn to the safest asset that thus far has been largely ignored.

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