#FedRateCutAffectsDollarTrend Reduced Foreign Demand for U.S. Dollar-Denominated Assets: A Fed rate cut reduces the interest income earned from U.S. dollar-denominated assets like bonds or savings accounts. This makes such investments less attractive to foreign investors, who may shift their capital to other currencies or markets, leading to a reduction in demand for the U.S. dollar and a potential decrease in its value.