#FedRateCutAffectsDollarTrend Reduced Demand for the Dollar in Global Trade: The U.S. dollar is the *world’s primary reserve currency* and is widely used in international trade. However, when the dollar weakens due to a Fed rate cut, there is less incentive for foreign central banks and investors to hold dollars as part of their reserves. This could lead to a *decrease in demand for the U.S. dollar* in global trade and reserve holdings.