#FedRateCutAffectsDollarTrend Decreased Foreign Investment in U.S. Bond*: A Fed rate cut typically lowers the yields on U.S. bonds, making them less attractive to foreign investors seeking higher returns. As demand for U.S. bonds drops, there is less foreign capital flowing into the U.S., leading to reduced demand for the dollar. This decrease in foreign investment can result in a depreciation of the dollar against other currencies.