RPT-NEXTUP-Dollar fall still likely on improved US jobs data

(Repeats to fix typo in headline)

* U.S. December nonfarm payroll loss estimate at 8,000

* Dollar likely to fall on any number close to expectations

* ADP report does little to change forecasts

NEW YORK, Jan 6 (Reuters) - An improved U.S. nonfarm payrolls report is not likely to be a boon for the dollar, according to analysts. At least, not yet.

The typical pattern of buying risky assets and selling the dollar on the back of positive U.S. economic news has broken down in recent months. In the last few weeks, the dollar has managed to rally after positive U.S. news.

But analysts say it will take a dramatic upswing in jobs growth to prompt investors to abandon that trade completely in favor of dollar-bullish bets.

The latest Reuters poll shows economists' consensus expectation for Friday's report is for 8,000 job losses in December.

"It's the middle-of-the-road or 'blah' number that poses the most challenges for the dollar," said Nick Bennenbroek, head of currency strategy at Wells Fargo Bank, which forecasts 24,000 jobs lost in December.

"A very firm number, 50,000 or upward, and we see the dollar gain on growth expectations," Bennenbroek said. "A very bad number, a fall of 100,000, and the more familiar relationship where concern on the economy sees a move to the dollar on safe haven" buying.

While some economists are expecting a rise in nonfarm payrolls for the first time in two years, investors are not expecting anything like the swings Bennenbroek said are needed to prompt dollar buying.

Barclays Capital forecasts the nonfarm payrolls report to rise 25,000, with the unemployment rate holding steady at 10 percent. Bank of New York Mellon forecasts a gain of 20,000 jobs with unemployment rising to 10.1 percent.

Any small rise in job growth could have the same impact as muted job losses. A rally in stocks on a knee-jerk rise in risk tolerance could send the dollar lower if markets conform to current trading patterns.

"Trends prior to (U.S.) Thanksgiving are coming back on line," said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon. "What is positive for the stock market is negative for the dollar."

Investors bought the dollar in 2008 and the first half of 2009 on safe-haven demand but then abandoned it in search of higher returns as the U.S and other economies showed signs of life.

Last year, the dollar fell 4.6 percent against a basket of major currencies .DXY, after rising 5.8 percent in 2008 as investors bought the dollar on safe-haven demand.

Ongoing strength in economic data could cause investors to return to a more fundamental approach, where increased attractiveness of U.S. assets stokes demand for the dollars to buy those assets, rather than borrowing against the dollar.

"We think we are in a transition where the negative correlation of equities to the dollar is changing, but for that to happen, we need to see more positive data surprises," said Wells Fargo's Bennenbroek.

In Wednesday's ADP Employer Services report -- often taken as gauge for the more comprehensive Labor Department report -- private employers shed 84,000 jobs in December, up from a loss of 145,000 jobs in the prior month but less than economists had forecast. For details, see [ID:nWEN8030]

The dollar weakened against the yen after the report, but few investors or analysts were willing to change their bets ahead of the more important government data on Friday.

The release of non-farm payrolls results in more volatility than most other economic releases, according to Morgan Stanley research. (Reporting by Nick Olivari; Editing by Padraic Cassidy)