Dollar weakens on month-end flows as traders await key data releases

The US Dollar Index slipped 0.2% to 101.85 during European morning trade, pressured by typical month-end rebalancing flows and cautious positioning ahead of crucial economic releases. Major pairs saw modest gains with EUR/USD climbing 25 pips to 1.0845 and GBP/USD advancing to 1.3165. Market participants are exercising caution as August draws to a close, with portfolio adjustments driving mild dollar weakness across the board. Traders are particularly focused on upcoming inflation data from the Eurozone and US GDP revisions expected later this week, which could shape September's monetary policy expectations. Technical indicators suggest the dollar's near-term support lies at 101.50, while resistance emerges at 102.20. The subdued volatility reflects typical pre-data positioning, with forex markets likely to see increased activity post-Labor Day as institutional flows return to normal levels.