USD softens as North American markets closed for Labor Day holiday

The US dollar index declined 0.2% in thin holiday trading as North American markets remained closed for Labor Day, with US equity futures showing tentative sentiment before the closure. The greenback's weakness was broad-based, with EUR/USD gaining 15 pips to 1.1085 and GBP/USD advancing to 1.3125. Trading volumes remained significantly below average with Wall Street and US Treasury markets shut, leaving European traders to navigate limited liquidity conditions. The absence of major economic data releases and reduced institutional participation created a subdued environment for price discovery. Technical indicators suggest the dollar's near-term weakness could extend if it breaks below the 101.50 support level on the DXY. Traders are positioning cautiously ahead of Tuesday's market reopening and upcoming US economic data releases later in the week, including ISM Services PMI and weekly jobless claims.