Dollar gains as concerns over U.S. stimulus package triggers risk-aversion

The greenback gained against majority of its peers on Monday as a surge in coronavirus cases across the globe together with a lack of progress in the U.S. stimulus package talks triggered risk-aversion. (Dow ended the day at 27,686 down by 651 points or 2.29%)  
  
Reuters reported White House economic adviser Larry Kudlow said talks between the Trump administration and House Democrats over another wave of COVID-19 aid were set to continue on Monday as both sides struggled to find a compromise one week before the Nov. 3 election.   Kudlow, speaking to reporters at the White House, said U.S. Treasury Secretary Steven Mnuchin would be in touch with the heads of relevant congressional committee chairs, but that there were still several areas of disagreement.  
  
Versus the Japanese yen, dollar found renewed buying at 104.66 in Australia and gained to 104.97 in early European morning on usd's broad-based strength. The pair continued to ratchet higher and rose to an intra-day high at 105.05 in New York morning on broad-based risk-aversion before retreating to 104.83 on profit-taking.  
  
The single currency opened slightly lower in Australia and dropped to 1.1830 ahead of European open on risk aversion. The pair then met renewed selling at 1.1847 in early European morning and fell to an intra-day low at 1.1804 on usd's broad-based strength before recovering to 1.1827 and then moved broadly sideways in subdued New York session.  
  
The British pound went through a roller-coaster session. Despite dropping from 1.3064 in Australia to session lows at 1.2993 in European morning on usd's broad-based strength. The pair then rallied to an intra-day high at 1.3075 in Europe on Brexit optimism as European Union chief negotiator Michel Barnier extended his stay in London to continue Brexit talks. However, cable pared its intra-day gains and retreated sharply to 1.2995 in New York morning on risk-aversion. Price then recovered to 1.3030 and then moved sideways.  
  
In other news, Reuters reported there is very little time left to bridge significant gaps between Britain and the European Union's positions on sticking points in talks about a post-Brexit trade deal, Prime Minister Boris Johnson's spokesman said on Monday.    "There is also much work to be done if we're going to bridge what are the significant gaps that remain between our positions in the most difficult areas and time is very short," the spokesman said.  
  
Data to be released on Tuesday:  
  
New Zealand imports, trade balance, exports, France producer prices, UK CBI distributive trades, and U.S. durable goods, durables ex-transportation, durables ex-defense, redbook, monthly home price, CaseShiller home price index, consumer confidence, Richmond Fed manufacturing index.