Investing.com - The dollar hit 17-month highs against its rivals Monday, led by a decline in sterling after the UK Prime Minister's spokesperson denied a report claiming the main elements of a Brexit deal could be presented to the UK as soon as Tuesday.
The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.67% to 97.38.
Prime Minister Theresa May's spokesman punctured earlier investor optimism over progress on a Brexit deal, denying a Financial Times report, citing European Union's Brexit negotiator Michel Barnier as saying the main elements of a deal were ready and could be presented to the UK cabinet as soon as Tuesday.
GBP/USD fell 0.96% to $1.2847.
"While some European officials are still sounding optimistic that an EC-UK deal can be struck in the coming weeks, the market has grown more skeptical," said Marc Chandler, chief market strategist at Bannockburn Global Forex.
A slump in the euro also added to the dollar's upbeat start to the week on expectations that the new Italian budget due Tuesday, would likely be rejected by the European Union as changes to budget were expected to be minimal.
EUR/USD fell 0.86% to $1.1240.
The Italian budget issue continues to keep a lid on upside in the common currency, as the Italian government has until Tuesday to resubmit its budget plans and it doesn't appear that the government will rein back its spending plans, said MUFG.
"Market participants concerns over the budget stand-off between the EU and Italy are likely to come into greater focus in the week ahead."
USD/JPY rose 1% to Y113.81 as the pairing gave up most of its gains after sentiment on risk turned sour amid a rout on Wall Street.
USD/CAD, meanwhile, rose 0.03% to C$1.3217 as an ongoing slump in oil prices weighed on the oil-price-sensitive loonie.