#FedRateCutAffectsDollarTrend This can lead to *capital outflows* from the U.S., reducing demand for the dollar and causing its value to decline. In addition, foreign investors’ perceptions of economic stability, their diversification strategies, and the global demand for U.S. debt and assets play crucial roles in determining how a rate cut affects the dollar’s strength on the world stage. Ultimately, these dynamics influence the broader trend of the dollar’s value, both in the short-term and long-term.