Commodities mostly drop on soaring dollar, China woes

London

MANY commodities fell last week as the dollar struck a 12-year peak against the euro, with sentiment hit also by weak data in key consumer China.

The European single currency sank on Friday to US$1.0466 - the lowest level since January 2003 - on expectations of a US rate hike later this year.

The euro edged closer to dollar parity after the European Central Bank began its quantitative easing stimulus on Monday.

A surging greenback makes commodities priced in the US unit more expensive for holders of other currencies.

World oil prices fell sharply as traders focused on the strong dollar, while record-high US crude stockpiles added to the global supply glut.

"Dollar strength has been a big driver of commodity weakness this week," said analyst Craig Erlam at trading firm Oanda. "Of course, the oversupply story in oil markets is keeping prices low but a stronger dollar just exacerbates any weakness. . . With the dollar expected to be one of, if not the, strongest performer this year, the downside risks to commodities remai…