Dollar steady as markets await US PCE; European stocks retreat

The US dollar held steady during European morning trading on August 29, with major pairs showing limited movement as investors awaited key US inflation data. EUR/USD traded flat near 1.0840, while GBP/USD hovered around 1.3170, both pairs consolidating recent gains. European equity markets eased lower, with the DAX down 0.4% and FTSE 100 declining 0.3%, reflecting cautious sentiment ahead of month-end rebalancing and the upcoming US PCE release. The dollar index (DXY) maintained support at 101.20, showing resilience despite yesterday's mixed economic signals. Market participants are particularly focused on the Core PCE reading, expected at 2.6% year-over-year, which could influence Federal Reserve rate cut expectations for September. Month-end portfolio adjustments are creating additional cross-currents in forex markets, potentially masking underlying directional bias until after the PCE data release.