#FedRateCutAffectsDollarTrend A Fed rate cut typically weakens the U.S. dollar because lower interest rates make the dollar less attractive to investors seeking higher returns. Here’s a quick summary of its effects: 1. Weaker Dollar – Lower rates reduce demand for USD as investors shift to higher-yielding assets. 2. Stronger Stocks & Commodities – A weaker dollar benefits U.S. stocks and commodities like gold and oil, as they become cheaper for foreign buyers. 3. Higher Inflation Expectations – Lower rates encourage borrowing and spending, potentially driving inflation up. 4. Forex Market Impact – USD may decline against major currencies like the EUR, JPY, and GBP. However, if a rate cut is expected or priced in, the impact might be less significant. Market sentiment and economic conditions also play a role.