Dec 6 (Reuters) - The dollar may be a profitable investment in 2025 with its safety providing a buffer for the risk aversion stemming from a trade war that's likely to result from the extreme plans that the new U.S. administration hope bolster the economy.

Demand for the safety the world reserve currency offers should grow if those plans are put into practice, and at the extreme a vicious trade dispute could result in a correction for stocks that sends demand for the greenback into overdrive.

Buying dollars provides a foil for risky equity investments that could be hurt, and thanks to the relatively high U.S. interest rate will most likely pay those who hold it some dividends.

Those buying dollars are also buying into a strong technical uptrend and have the support of the U.S. economy which has been faring better than many rivals.

While playing safe and hedging riskier bets, investors are buying an asset favoured by both techs and fundamentals that should support it whether a risk averse situation unfolds or not.

The bullish trend, which has endured since 2011, underwent a correction in 2022 that resulted from the overcrowding of investment that laid the foundation for a bigger rise.

The dollar has gained six percent in the wake of that correction reaching 131.92 at the end of November, just short of the 133.36 peak attained in 2022.

With far less invested in the dollar now there is little to stop it rising further on the back of the increased demand that's certain to arise when the 2022 peak is eclipsed.

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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)

((jeremy.boulton@thomsonreuters.com))