GLOBAL MARKETS-Dollar, stocks rise as commodities fall sharply

(Adds opening of U.S. markets, byline; dateline previous LONDON)

By Herbert Lash

NEW YORK, March 20 (Reuters) - Gold and oil fell sharply on Thursday as investors dumped commodities and lifted U.S. stocks on the view that inflation could moderate if the trend in futures markets continues.

The dollar rose to a week-high against the euro as investors fleeing commodities repatriated their cash into the beleaguered U.S. currency. The sharp drop of the dollar this year has given a major lift to commodities denominated in the U.S. currency.

Treasury debt prices mostly slipped but the shortest-dated government instruments rallied again amid a powerful safe-haven bid on the exodus out of commodities.

European stocks pared losses, bolstered by gains on Wall Street following a better-than-expected survey on factory activity in the U.S. mid-Atlantic region, but commodity-related stocks and banking shares kept indexes in negative territory.

Oil fell below $100 a barrel for the first time in two weeks, extending a hefty sell-off the previous day on growing concerns that a slowdown in top consumer the United States would undermine global demand for energy.

"We continue to see profit-taking among commodities. There are also macro-economic concerns about the economy and the dollar has been doing better," said Mike Wittner, global head of oil market research in London for Societe Generale.

Gold <XAU=> dropped more than 4 percent to a one-month low, while platinum slid more than 5 percent to the lowest since early February as funds cashed in.