Dollar index subdued as lower oil prices ease inflation pressure
ITF Team3 min read
The US Dollar Index slipped to around 102.20 on Nov 9, 2026, as falling crude prices and softer inflation outlook dented the greenback’s recent gains.
Key takeaways
- The US Dollar Index traded near 102.20 during Asian hours on 11/9/2026.
- Crude oil prices retreated after President Donald Trump said further US action against Iran was unlikely.
- October non‑farm payrolls rose 165,000, beating the 65,000 forecast.
- CME FedWatch shows a >78% chance of a 25‑bp rate hike at the Dec 2026 FOMC meeting.
The US Dollar Index (DXY) slipped to roughly 102.20 in Asian trading on Monday, 9 Nov 2026, after two days of modest gains. The pull‑back was sparked by a drop in crude oil prices, which eased short‑term inflation concerns and nudged the greenback lower.
Oil price retreat and its immediate effect on the greenback
Energy markets fell after President Donald Trump signalled that further military action against Iran was “highly unlikely,” provided the nuclear talks stayed on track and the Strait of Hormuz remained open. The prospect of a de‑escalation removed a key geopolitical risk premium that had been lifting oil prices. With Brent crude sliding, the dollar‑linked commodity lost some of its support, contributing to the DXY’s modest decline.
Traders also noted that the conflict‑driven rally in oil had been a factor in the Republican Party’s midterm setbacks, reinforcing the link between geopolitics, energy costs and currency sentiment. As oil eased, the inflation‑drag that had bolstered the dollar’s recent strength weakened, prompting a short‑term correction in the index.
Labor market strength keeps Fed‑tightening expectations high
Despite the oil‑driven relief, the US dollar still benefits from a robust labour market. October non‑farm payrolls surged by 165,000, far outpacing the 65,000 consensus estimate and building on September’s revised 60,000 gain. The unemployment rate slipped to 4.1%, beating the 4.2% forecast. These figures reinforce expectations that the Federal Reserve will continue to tighten monetary policy.
The CME FedWatch tool now shows a probability of more than 78% that the Fed will raise rates by 25 basis points at its December 2026 meeting. This heightened likelihood underpins the dollar’s longer‑term bias, even as the index trades lower in the short run.
Read also: Gold price stalls near $4,148 ahead of US CPI release
Technical picture: bullish bias above key moving averages
On the daily chart, the Dollar Index Spot sits at 102.20, comfortably above the nine‑period and 50‑period exponential moving averages (EMAs). The 14‑day Relative Strength Index (RSI) hovers around 57, indicating positive momentum without being overbought. The FXS Fed Sentiment Index stands at 143.10, reflecting continued market belief in further policy tightening.
Support levels are mapped at the nine‑period EMA near 101.95 and a deeper floor at the 50‑period EMA around 101.36. As long as the index remains above these thresholds, the path of least resistance points upward, with any pull‑backs likely viewed as consolidation within a broader bullish trend.
Currency pair reactions and broader market context
The DXY’s dip was mirrored in several major pairs. The USD/NZD posted the largest loss among the basket, while USD/JPY slipped back into the red as traders took profits after the NFP‑driven rally. In contrast, AUD/USD held near 0.6900, buoyed by China’s suspension of 24% tariffs on US goods and a calmer US‑Iran backdrop, which helped the Aussie retain its recovery gains.
Gold prices recovered above $4,020 in early European trading, benefitting from the weaker dollar and hopes for diplomatic progress. Bitcoin, however, stayed under pressure, trading below its 50‑week simple moving average at $75,222 after a five‑week losing streak and record outflows from spot BTC ETFs.
What to watch next
All eyes now turn to the US Consumer Price Index (CPI) report due on Tuesday, which will provide the first post‑gap inflation reading since October’s data shutdown. Analysts expect headline CPI to rise 0.28% month‑over‑month and core CPI to increase 0.21%. A softer core reading could ease some pressure on the Fed, but the prevailing market view still leans toward a December rate hike.
Later in the week, the Producer Price Index (PPI) on Friday will offer another gauge of upstream price pressures. Traders should also monitor oil price movements, especially any news from the Strait of Hormuz, as renewed geopolitical tension could quickly reverse the current dollar weakness.
- Nov 9 2026 – DXY around 102.20; oil prices retreat after Trump’s Iran comment
- Oct 2026 – Non‑farm payrolls +165 k, unemployment 4.1%
- Dec 2026 FOMC – >78% chance of 25 bp hike (CME FedWatch)
- Tue Nov 10 – US CPI expected +0.28% MoM, core +0.21% MoM
Frequently asked questions
Why did the US Dollar Index fall despite strong US jobs data?
The index slipped because crude oil prices dropped after President Trump said further US military action against Iran was unlikely. Lower oil reduces inflation expectations, which temporarily weakens the dollar even though robust payrolls keep Fed‑tightening bets high.
What technical levels are key for the Dollar Index in the short term?
Immediate support lies at the nine‑period EMA around 101.95 and a deeper floor at the 50‑period EMA near 101.36. As long as the index stays above these moving averages, the prevailing bias remains bullish.
Official data sources
Related news
- Gold price stalls near $4,148 ahead of US CPI release
- Silver price nears $53 as oil falls and inflation pressure eases
- Gold rebounds above $4,100 despite strong US NFP data
- AUD/USD holds gains after China CPI data
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This article is compiled from international market news for information only. It is not investment advice.