#FedRateCutAffectsDollarTrend Increased Foreign Exchange Volatility: When the Fed cuts interest rates, it can lead to greater volatility in the foreign exchange market. As investors react to changes in interest rates and economic conditions, fluctuations in the value of the dollar become more pronounced. This volatility may impact global trade, international investments, and the overall confidence in the dollar, potentially causing it to weaken as market uncertainty grows.