U.S. Dollar Climbs Amid Risk Aversion

The U.S. dollar strengthened against its major counterparts in the European session on Monday amid risk aversion, as Germany faced political crisis over immigration and trade worries persisted ahead of a July 6 deadline when the United States is due to impose the tariffs on Chinese exports.

While U.S. tariffs on $34 billion of Chinese products take effect on July 6, China is expected to retaliate with duties of its own on American goods.

Canada's retaliatory tariffs on American goods officially kicked in Sunday in a tit-for-tat response to the Trump administration's duties on Canadian steel and aluminum.

German political crisis also weighed, as interior minister Horst Seehofer offered to resign both his office and his position as head of the hardline conservative Bavarian CSU party.

Weak manufacturing data from China, Europe and the U.K. also dampened sentiment.

The U.S. Federal Reserve is scheduled to release the minutes of its latest monetary policy meeting this week, which may shed some additional light on the outlook for U.S. interest rates.

The monthly U.S.jobs report along with reports on manufacturing and service sector activity may also influence trading sentiment as the week progresses.

The currency has been trading in a positive territory against its major counterparts in the Asian session.

The greenback climbed to 0.9935 against the franc, from a session's low of 0.9894 seen at 5:00 pm ET. On the upside, 1.01 is likely seen as the next resistance level for the greenback.

The greenback spiked up to 0.6724 against the kiwi, a level unseen since May 2016. This may be compared to a 4-day low of 0.6791 hit at 5:00 pm ET. Next key resistance for the greenback is likely seen around the 0.66 level.

The greenback advanced to 1.3142 against the pound and 1.1626 against the euro, from its early low of 1.3209 and a session's low of 1.1690, respectively. The next likely resistance for the greenback is seen around 1.29 against the pound and 1.15 against the euro.

The greenback rose to 1.3189 against the loonie and 0.7356 against the aussie, off its early low of 1.3139 and a 6-day low of 0.7411, respectively. The greenback is seen finding resistance around 1.33 against the loonie and 0.72 against the aussie.

On the flip side, the greenback eased back to 110.60 versus the yen, off its early near a 6-week high of 111.06. If the greenback continues its fall, 108.00 is possibly seen as its next support level.

The latest survey from Nikkei showed that Japan manufacturing sector continued to expand in June, and at an accelerated rate, with a manufacturing PMI score of 53.0.

That's up from 52.8 in May, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

The U.S. construction spending for May and ISM manufacturing index for June will be out in the New York session.