GLOBAL MARKETS-Dollar gallops to fresh highs; stocks fall

* Wall St off for week, European stocks rise for 6th straight week

* Dollar index hits highest since April 2003 (Updates to U.S. trading, changes byline, dateline, previous LONDON)

By Rodrigo Campos

NEW YORK, March 13 (Reuters) – The dollar continued to power higher on Friday, pressuring stocks and commodities, on expectations of a Federal Reserve interest rate hike in contrast to easing monetary policy actions by most other major central banks.

The dollar index was on track for a back-to-back weekly gain of more than 2 percent, setting up its strongest two-week performance in almost five years.

Stocks fell on Wall Street, with the S&P 500 set to fall for a third straight week. The index is about 3 percent below its record high set this month. Energy shares weighed on it the most as crude prices fell near six-year lows plumbed in late January.

“As (oil) keeps falling there are bigger concerns that we could see problems with respect to capital expenditures and employment in certain regions of the (United States),” said Michael Arone, chief investment strategist for State Street Global Advisors’ U.S. Intermediary Business in Boston.

The Dow Jones industrial average fell 183.64 points, or 1.03 percent, to 17,711.58, the S&P 500 lost 17.15 points, or 0.83 percent, to 2,048.8 and the Nasdaq Composite dropped 30.21 points, or 0.62 percent, to 4,863.08.

The MSCI All-Country World equity index was down 0.8 percent and emerging-markets stocks fell 1 percent. The FTSEurofirst 300 pan-European index was down 0.1 percent.

Stocks in Europe continued to be supported by the European Central Bank’s bond-buying plan, which kept euro zone yields near record lows.

Investors hope a meeting of Fed policy-makers on March 17 and 18 will yield clues about the timing of a rate increase.

The divergence in monetary policy pushed the euro lower against the greenback, briefly testing Thursday’s 12-year low below $ 1.05. It was last down 1.1 percent at $ 1.0519.

The Mexican peso weakened versus the dollar after a two-day respite, trading within 1 percent of its record low hit on Wednesday.

“What we see is a dollar move, massive dollar buying from real money as well as hedge funds. It’s being bought all across the board versus all currencies and those relying heavily on short-term inflows are being hit the hardest,” said Bernd Berg, strategist at Societe Generale in London.

The dollar index added 0.6 percent to 100.06.

U.S. crude fell 3.6 percent to $ 45.36 per barrel, while Brent crude fell 1.4 percent to $ 56.26. The global oil glut is getting bigger and U.S. production shows no sign of slowing, the International Energy Agency said.

The U.S. benchmark 10-year Treasury note yield edged up to 2.0998 percent from Thursday’s 2.096 percent, reflecting a price decrease of 1/32.

Spot gold was little changed near $ 1,154 an ounce, following nine consecutive sessions of declines. Copper dipped 0.4 percent but was on track to finish the week with a 1.5 percent gain.

(Additional reporting by Sujata Rao-Coverley in London and Ryan Vlastelica in New York; Editing by James Dalgleish)