By Yoruk Bahceli

LONDON (Reuters) -Reserve managers tend to buy the dollar when it weakens and sell when it rises, suggesting they might play a lesser role in driving the greenback than private investors, Standard Chartered said in a note on Thursday.

Demand from central banks managing trillions of dollars worth of currency reserves is seen as crucial to the dollar's position as the world's top safe-haven currency.

But U.S. President Donald Trump's confrontations with longstanding allies over trade and security this year, along with his attacks on the Fed have raised concerns around the status of the dollar, which has slumped 9% this year.

Standard Chartered's analysis, however, questioned whether reserves still make the dollar exceptional.

It found that the levels of U.S. dollar reserves and the dollar index, which tracks the greenback against a basket of currencies, have moved in opposite directions for 17 of the last 20 quarters.

It noted that the dollar fell 6.6% in the second quarter, which kicked off with Trump's Liberation Day tariff announcements that roiled markets, but dollar reserve holdings increased by around $50 billion.

"This suggests that private-sector buying has driven USD, and reserve managers have been reactive," said Steve Englander, the bank's global head G10 FX research.

Englander said reserve managers may be balancing competitiveness and portfolio considerations.

"If the private sector is a net seller of USD, it is hard to see reserve managers piling on and really sinking the USD," he wrote.

"On the other hand, when the private sector is buying USD, reserve managers take advantage to shrink their exposure, while avoiding selling if it looks as if their selling will heighten a competitiveness shock."

The size of directional flows from private sector investors may have also grown relative to reserve managers, he noted, so are likely to outweigh them.