USD index retreats, oil prices consolidate; market awaits new direction post

On Friday (November 8),How many companies have foreign exchange licenses in China during the Asian session, U.S. crude oil prices slightly retreated, trading around $72.14 per barrel, following a nearly 1% rise due to a decline in the U.S. dollar index. The latest Federal Reserve interest rate decision, as expected, cut rates by 25 basis points to 4.50%-4.75%, putting pressure on the dollar, which further supported oil prices. However, from the supply side, the upward momentum for oil prices is insufficient, and prices are consolidating near the zone of resistance, awaiting further fundamental changes to guide future direction.

Federal Reserve Chairman Powell expressed a cautious stance on future interest rate policy during a press conference, stating it is "difficult to provide clear interest rate guidance," and emphasized the Fed's flexibility in adjusting monetary policy pace. The latest data from the U.S. showed an increase in jobless claims, rising labor costs, and improved productivity, which has dampened market expectations for further Fed rate cuts. Nonetheless, the rate cut has boosted market sentiment, with U.S. stocks and commodities climbing, and U.S. Treasury yields and the dollar index declining.

Additionally, supported by positive external factors, Asian markets saw increased risk appetite, with emerging market ETFs rising by 2.4%, further supporting the expectation of a rebound in oil demand. Institutional analysis suggests that the future pace of Fed rate cuts may not be as swift as the market previously anticipated, which to some extent, supports oil prices. However, uncertainties in the job market and the risks of Trump policies still add variables to the outlook.

In the future market, attention will be on whether the U.S. dollar index will return to the bullish range, which could prompt another decline in oil prices. In the short term, oil prices will remain in the current range while awaiting more data and market guidance.

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