Dollar picks up ahead of Fed meeting as oil prices sink

The dollar extended its gains against the euro Monday, hitting another 12-year high ahead of a closely watched Federal Reserve policy meeting this week, while oil prices fell again as US supplies continued to build.
Shanghai was the stand-out stock market in the region, adding to last week's gains after Chinese Premier Li Keqiang said the government had enough armoury to support the world's number two economy.
Shanghai was up 0.54 percent, Seoul gained 0.21 percent and Tokyo added 0.38 percent, but Hong Kong eased 0.22 percent and Sydney lost 0.31 percent.
Investors are keeping their focus on the Fed's policy meeting Wednesday, hoping it will give a clearer timeline for when it will lift interest rates as the US economy picks up strength.
World markets took a hit last week and the dollar rallied in reaction to a strong US jobs report that increased the likelihood of a summer rate hike.
But while equities have settled, the dollar continues to advance, hitting a more than 12-year high against the euro, which has also been battered by the European Central Bank's new bond-buying stimulus programme.
In early trade Monday the euro fell to $1.0451 -- its lowest since January 2003 -- before ticking up slightly to $1.0488, compared with $1.0489 in New York. The single currency was also at 127.31 yen compared with 127.38 yen in US trade.
The dollar fetched 121.37 yen against 121.44 yen.
"The Fed has never found itself on the other side of global policy and this central bank divergence is making the dollar the most sought-after currency on the planet," Evan Lucas, a markets strategist in Melbourne at IG Ltd., wrote in a client note, according to Bloomberg News.
Oil prices fell further in Asia, extending Friday's losses after the International Energy Agency warned that US inventories were nearing storage capacity, adding to a global supply glut.
US benchmark West Texas Intermediate for April delivery fell 67 cents to $44.17, while Brent crude for April eased 69 cents to $53.98.
In China Premier Li said fresh measures could be taken to support the economy, which last year grew at its slowest pace in 24 years and is forecast to weaken this year as leaders try to transition it from a reliance on exports and investment towards consumer spending.
Authorities have cut interest rates twice since November and also reduced the amount of cash banks must keep in reserve in a bid to boost lending.
But after the close of the National People's Congress parliament Li told reporters: "We still have a host of policy instruments at our disposal."
Gold fetched $1,154.50 against $1,155.83 late Friday.
Source: AFP