Brent oil trading firm at $78, eyes on US Dollar Index

Brent oil futures are trading firm over $78 a barrel on Wednesday as yesterday’s US Fed comments on the US economy and money prinitng send the US Dollar Index on a big slide lower.

In London, Brent crude oil futures for November 2010 delivery was trading at $78.24, 09.15 GMT on the ICE Futures Exchange.

US Dollar Index Will Fall Below the 80 Mark

The ICE Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.5 percent to 80.016, its lowest since the spring of 2010. The dollar is read to fall back under the 80 mark and could do so in the next few trading days.

The US Federal Reserve Bank announcement had the US Dollar Index plummeting lower. The US Fed made it pretty clear that they will try and drop the dollar at all costs by simply more quantitative easing (money creation equals US dollar dilution).

While the majority of investors don’t expect to see actual changes to the US Fed’s current policy, they believe that the physical evidence which proves that the American economy is faltering will be enough to spark debate on the issue, which analysts believe would be sufficient enough to keep the greenback on its downward path.

A lower dollar makes commodities including Brent and WTI oil futures move higher as they are priced in US dollars.

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