#FedRateCutAffectsDollarTrend A Fed rate cut generally weakens the U.S. dollar due to: 1. Lower Interest Rates – Reduces returns on dollar-denominated assets, making the USD less attractive to investors. 2. Increased Liquidity – More money supply can lead to dollar depreciation. 3. Boost to Risk Assets – Investors may shift to higher-yielding currencies and assets. 4. Inflation Expectations – Lower rates can increase inflation, further weakening the dollar. Overall, a Fed rate cut typically leads to USD depreciation, benefiting riskier currencies and assets.