#FedRateCutAffectsDollarTrend Impact on U.S. Dollar’s Carry Trade: A Fed rate cut can influence carry trades, where investors borrow in low-interest rate currencies to invest in higher-yielding assets. When the Fed lowers rates, the U.S. dollar becomes less attractive for borrowing in carry trades, leading to a decrease in demand for the dollar. As investors move capital to other currencies with higher returns, the value of the dollar may weaken.