RTTNews - The dollar extended its gains from the previous session Monday morning in New York, bolstered by increased risk aversion as the correction to the summer rally in equities took hold.

Stock futures are sharply lower on Wall Street, while Tokyo stocks suffered their biggest one-day loss in months overnight. Shanghai stocks plunged 5 percent.

A rash of discouraging economic data plagued the markets late last week, restoring interest in the safe haven dollar. Consumer spending, which accounts for more than 60% of the economy, is still sluggish, raising doubts about the sustainability of broader economic recovery in the near term.

The dollar jumped to a 3-week high versus the euro Monday morning, rising to 1.4048. Earlier this month, the dollar hit a 2009 low of 1.4446, but with stocks set for a pull back, it is not likely test those levels in coming days.

Eurostat reported Monday that the euro area trade balance showed a surplus of EUR 4.6 billion in June, larger than the revised EUR 2.1 billion surplus recorded in May.

Meanwhile, the dollar rose to a monthly high of 1.6274 versus the sterling, pulling further away from a 10-month low of 1.7012 hit earlier in August.

The buck also continued its rebound versus the loonie, rising to a monthly high of C$1.1120. Two weeks ago, the buck was sitting a 10-month low of C$1.0630.

On the flip side, the dollar failed to rally versus the yen, easing slightly to a 2-week low of 94.50. Both the dollar and yen have risen against higher-yielding counterparts since Friday morning.

The Japanese economy pulled out of its worst recession since World War II in the second quarter on government stimulus measures and strong exports.

Monday, the Cabinet Office said real gross domestic product expanded 3.7% on an annualized basis during the three months to June, after shrinking for four straight quarters.

Back in the US, results of the New York Federal Reserve's Empire State manufacturing survey, which elicits response from 200 manufacturing executives in New York state, is slated to be released at 8:30 AM ET on Monday. The headline general business conditions index for August is expected to come in at 2.2.

The National Association of Homebuilders' is scheduled to release the results of their survey on homebuilders' confidence at 1 PM ET.

The housing market index rose 2 points to 17 in July compared to 15 in June, with the July reading marking the best since September 2008.

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