By Alonso Soto and Luciana Otoni BRASILIA (Reuters) - The Brazilian government's move to relax budget spending rules could undermine its own efforts to tame a surge in prices that threatens to put the brakes on growth in Latin America's largest economy.

By Jeff Mason and Mark Felsenthal WASHINGTON (Reuters) - President Barack Obama proposed a $3.77 trillion (2.45 trillion pounds) budget on Wednesday that combines controversial cuts to social safety net programs with tax increases on the wealthy in a package the White House hopes will jumpstart deficit-reduction talks. The proposal, an annual attempt to identify and fund the president's policy desires, is unlikely ever to become law.

President Barack Obama's fiscal 2014 budget released Wednesday sees US economic growth picking up to 3.2 percent next year from 2.3 percent this year. The $3.77 trillion proposed budget also assumes that unemployment will average 7.2 percent next year, down from the current 7.6 percent. The budget for the fiscal year beginning October 1 foresees the US deficit falling to $744 billion, compared to a projected shortfall of $973 billion in the current year. That would bring the country's deficit down to 4.4 percent of gross domestic product from 6.0 percent this year.

Oil extended gains in Asia on Tuesday as financial markets cheered Japan's aggressive monetary easing policy seen as key to reviving the world's third largest economy, analysts said. New York's main contract, light sweet crude for delivery in May, added 29 cents to $93.65 a barrel and Brent North Sea crude for May delivery rose 51 cents to $105.17 in mid-morning trade in Asia. Both contracts closed higher on Monday.