US dollar continued its depreciation

September 06, 2021 15:19

Last week the currency market remained in a corrective mood for the US dollar and the world's reserve currency index depreciated by -0.6%, the lowest level in the last month. 


Data in the world's largest economy pointed to continued growth, but at a moderate slowdown compared to the first half of the year. The actual ISM Manufacturing Purchasing Managers' Index was 59.9 points and remained stable compared to the previous month. The country's labour market created 235 thousand jobs, but the actual result fell well short of market expectations of 750 thousand, suggesting that the labour market is recovering at a slower pace than investors expect and contributing to slower growth figures in the second half of 2021. The unemployment rate fell to 5.2%. The US Consumer Confidence Index was 113.8 points, slowing down for the second month in a row from the pandemic highs. New car sales fell to 13.1 million year-on-year, the lowest level in over a year. New jobless claims fell again, from 0.353 million to 0.340 million for the week, a positive sign. 

Pandemic trends showed an improvement after more than 2 months of rapid growth in the number of cases, with the global spread of the delta virus. Last week, the average number of infections fell from 654 to 629 thousand per day. The situation in the US showed a slowdown, with the weekly average of new cases rising from 156 to 163 thousand per day. The number of vaccinations administered in the country increased from 367 million to 374 million, a change of 7 million and the fastest rate of vaccination since the beginning of July. Overall in the US, the number of people vaccinated with at least one dose rose from 61.3% to 62.2% of the population, an increase of 0.9% over the week. In Lithuania, the number of people vaccinated with at least one dose rose from 58.9% to 59.9%, a difference of only 1.0%. Nevertheless, the vaccination rate in Lithuania reached 70% this week in the population aged 16 years and over. In England, the number of cases has stabilised at 34 thousand per day. 


The main currency pair EUR/USD appreciated throughout the week and was briefly above the 1.190 level on Friday. Economic data in the Old Continent were good and showed accelerating price growth. The actual European Manufacturing Purchasing Managers' Index stood at 61.4 points and remained in a strong growth zone. Germany's preliminary annual inflation rate was 3.9%, while Europe's jumped to 3.0%, significantly higher than the 2.2% of the previous month. The Producer Price Index showed a 12.1% annual increase in July, suggesting that upward pressure on prices continues, especially while the commodity cycle is recording new highs. In Germany, the labour market situation continued to improve, with the number of unemployed falling by 53 thousand in August and the unemployment rate falling to 5.5%. Also, German retail sales volumes were -0.3% lower in July than in the same period a year earlier. The EUR/USD pair ended the week up 0.7%. 


The most important Asian pair USD/JPY continued to move in a channel around its 50-day moving average on the daily chart. Among the data was the actual Manufacturing Purchasing Managers' Index, which stood at 52.7 points and suggested moderate growth in the sector. The services sector was only 42.9 points and indicated a decline in activity. July retail sales volumes showed a 2.4% year-on-year increase. Industrial production in July was 11.6% higher than a year earlier. USD/JPY ended the week down -0.1%. 


The British pound/US dollar pair started the week very calmly and then appreciated significantly, ending the week at the level of 1.386 points. There were no important economic data. GBP/USD ended the week up 0.8%. 

Economic Events 

This week is quiet, with no important data scheduled and the US will have a day of unemployment. On Tuesday, the Chinese international trade figures, the European preliminary economic growth for the second quarter and the ZEW index results for Europe and Germany will be monitored. No important data are scheduled for Wednesday, while Thursday will be devoted to the European Central Bank and decisions on changes to the quantitative easing programme. On Friday, Industrial Production data for England and the US Producer Price Index are due. 

According to Admiral Markets market sentiment data, 28% of investors have long positions in the EUR/USD pair (down -1 percentage point compared to last week). In the main Asian pair USD/JPY, 55% of investors have long positions (up +6 percentage points). In GBP/USD, 22% of participants expect a rise (down -25 percentage points). Such market data is interpreted as a contrarian indicator so that EUR/USD and GBP/USD are likely to appreciate and USD/JPY to depreciate. The analysis of positioning data should be combined with fundamental projections and technical analysis. 

Source:,, Admiral Markets MT4 Supreme Edition, 



The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following: 

  1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research. 
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content. 
  3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest. 
  4. The Analysis is prepared by an independent analyst, Roberto Rojas (analyst), (hereinafter “Author”) based on their personal estimations. 
  5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. 
  6. Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed. 
  7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
Admirals An all-in-one solution for spending, investing, and managing your money

More than a broker, Admirals is a financial hub, offering a wide range of financial products and services. We make it possible to approach personal finance through an all-in-one solution for investing, spending, and managing money.