COMMENT-A hard line from Trump on tariffs should worry FX traders

March 6 (Reuters) - Donald Trump wanted tariffs and lower oil prices and has so far got both, while stocks are proving resilient and the dollar has fallen, providing the economy with stimulus and potentially encouraging Trump to take a harder line.

A rise in the value of the world's reserve currency as a result of the trade dispute could have mitigated much of the potential effect of tariffs. But while the dollar rose after tariff hikes in Trump's first term, this time investors have sold the greenback, worried about the impact of the tariffs on U.S. inflation and growth.

The dollar's fall is punishing for the nations targeted by tariffs, making their exports much more expensive and effectively tightening monetary policy when most of the nations opposed to U.S. policy are trying to support their economies.

The unexpected dollar drop - which could gather pace if the Federal Reserve reacts to lower oil prices by cutting the U.S. interest rate - is forcing traders to sell the dollars they once held.

A significant short position might emerge in the midst of an intensifying trade dispute, which would result in traders gambling in a very uncertain time.