Published on: 2026-07-24
Updated on: 2026-07-24
When people trade, they buy or sell a financial product because they believe its price may change. The product could be a company share, a currency, a government bond, gold, oil, or a fund containing several investments.
However, trading involves more than guessing whether a price may rise or fall. Prices often move because borrowing costs change, currencies strengthen or weaken, companies report new results, or investors become more or less willing to take risks.
This is why traders follow Wall Street, a common name for the financial markets of the United States (US). The US has one of the world’s largest financial systems, the dollar is widely used in international trade and borrowing, and many large companies listed in the country earn money around the world.
Changes in the US may therefore affect currencies, borrowing costs, commodity prices, and company shares thousands of kilometres away.
On 17 June 2026, the US central bank, known as the Federal Reserve (Fed), kept its main interest-rate target at 3.5% to 3.75%. Although the decision concerned the US economy, people following currencies, gold, bonds, and shares elsewhere also paid attention because US rates may affect investment returns, demand for dollars, and borrowing costs in other countries.
These effects often travel through three main routes:
US interest rates.
The US dollar.
Global businesses listed on US exchanges.
The Fed influences short-term borrowing costs through its main interest-rate target.
US Treasury yields are also closely followed. They are the returns investors receive from holding US government bonds and are often used when comparing the possible returns from bonds, shares, and other assets.
When Treasury yields rise, US government bonds may become more attractive compared with shares. Investors may then become less willing to pay high prices for companies whose profits are expected mainly in the future.
Higher US yields may also encourage international investors to move money into US bonds. Those investors need dollars to buy the bonds, which may increase demand for the currency.
A stronger dollar and higher borrowing costs may then place pressure on companies and governments outside the US, especially if they have debts that must be repaid in dollars.
The Fed raised rates rapidly in 2022 as it tried to bring down high inflation. By November, its main interest-rate target had reached 3.75% to 4%.
As US interest rates rose, the dollar strengthened against many other currencies. By October 2022, it had gained 22% against the Japanese yen and 13% against the euro since the start of the year, according to the International Monetary Fund (IMF).
Ghana was one country that came under greater pressure. The cedi lost more than 40% of its value against the dollar during 2022, while the country’s foreign-currency reserves fell. Year-on-year inflation reached 54.1% in December.
Ghana already faced high government debt and domestic economic problems, but the stronger dollar and higher global borrowing costs added to the strain.
Countries did not all respond in the same way. The currencies of Brazil and Mexico strengthened during parts of 2022 because their local interest rates, exports, and economic conditions were different.
For someone outside the US, the effects of a Fed rate cycle may appear through a weaker local currency, more expensive imports, higher borrowing costs, or changes in share and bond prices.
Around half of international bank lending and cross-border bonds are denominated in US dollars, according to the Bank for International Settlements (BIS).
Many borrowers outside the US earn their income in another currency.
Suppose a company earns Malaysian ringgit but must repay a loan in dollars. When the dollar strengthens, the company needs more ringgit to repay the same dollar amount.
Its debt has not changed in dollars, but its local repayment cost has increased.
A stronger dollar may therefore place pressure on companies, banks, and governments with debts that must be repaid in US currency.
The same currency effect applies to international trade. Many commodities, including gold and oil, are priced in US dollars.
Japan experienced this in 2022. By October, the dollar had risen about 22% against the Japanese yen since the start of the year.
Because Japan imports much of its fuel and raw materials, buyers needed more yen to pay for dollar-priced oil, natural gas, coal, and other goods.
The Bank of Japan said higher import prices reflected both rising global commodity prices and the weaker yen. Some of those costs were then passed on through energy, food, and other consumer prices.
However, the dollar is only one part of a commodity move. Russia’s invasion of Ukraine disrupted global energy supplies in 2022, pushing fuel prices higher even as the dollar strengthened.
Gold may also rise with the dollar when investors seek both during periods of financial or geopolitical concern.
A stronger dollar does not automatically mean lower gold or oil prices. Supply, demand, inflation, and market uncertainty may have a greater effect.
This helps explain why imported fuel, food, or other goods may become more expensive locally.
A stronger dollar may reduce the reported value of sales that US companies earn overseas.
Microsoft provided a clear example in the quarter ending 30 June 2022. Its revenue grew 12%, but growth would have been 16% if exchange rates had remained unchanged. The company also said unfavourable currency movements reduced its quarterly revenue by US$595 million.
This did not mean Microsoft had lost US$595 million in customer sales. Part of the effect came from converting revenue earned in other currencies into a stronger US dollar.
Companies often refer to results at constant currency, which removes the effect of changing exchange rates. This helps readers see whether a change came from the company’s business performance or from currency movements.
Many large companies listed in the US earn revenue across several countries. The location of their stock-market listing does not necessarily show where their customers are.
A chipmaker may report whether cloud providers and technology companies are increasing orders for data-centre equipment. Its outlook may offer clues about spending on artificial intelligence (AI) infrastructure.
A global consumer company may report stronger sales in one region and weaker sales in another. These figures may show where household demand remains firm and where consumers are cutting back.
Company results do not provide a complete picture of the global economy, but their sales, orders, and forecasts may reveal changes in particular industries or regions before those changes appear in wider economic data.
This helps explain why results from one US-listed company may affect its suppliers, competitors, or related markets in other countries.
Major indices then combine the movements of individual shares into the headline numbers reported in financial news.
When US markets move sharply, the headline rarely explains the whole situation. Three questions can help readers understand what happened.
Was it a Fed decision, inflation data, company earnings, political news, or a development affecting one industry?
A move driven by US rate expectations may spread across bonds, currencies, commodities, and shares. A move caused by one company may remain concentrated in its industry.
Interest-rate news may reach bond and currency markets. Changes in the dollar may affect imported goods, commodities, and companies earning revenue overseas.
A problem affecting oil supply may push energy prices higher without having the same effect on technology shares.
Identifying the cause helps show which market connections are relevant.
A headline index may rise because a few very large companies gained, even if many other shares did not.
Different indices also follow different parts of the market. The Standard & Poor’s 500 (S&P 500) covers large companies across several industries, while the Nasdaq 100 has greater exposure to large technology and growth-oriented companies.
A rise in the Nasdaq 100 may therefore reflect strength among large technology companies rather than gains across the entire US market.
Checking whether several sectors are rising or whether the move is concentrated among a few companies provides a clearer view of how widely it has spread.
These questions do not predict what will happen next. They help readers understand what is happening now and why it may affect markets closer to home.
People may follow the US market through an individual stock, an exchange-traded fund, or a product that follows their price movements.
An individual stock represents one company.
An exchange-traded fund (ETF) groups several investments into one fund. Some ETFs cover companies across several industries, while others focus on an area such as semiconductors or energy.
Contracts for Difference (CFDs) follow the price of a stock or ETF without giving the trader ownership of it.
CFDs use leverage, meaning a smaller deposit controls a larger position. This increases the size of both possible gains and losses.
EBC is currently offering zero commission and zero swap fees on eligible US stocks and ETF CFDs until 11 September 2026. The offer is subject to the official rules, product eligibility, platform conditions, and regional availability.
Reduced fees do not remove trading risk. Market movements, leverage, and other trading costs still need to be considered before opening a position.
The next time a Fed decision, a stronger dollar, or a sharp move in the S&P 500 appears in the news, the effects may not stop in the US. They may reach local currencies, imported prices, commodities, and companies operating across several countries.
Understanding what caused the move, where the connection runs, and how widely it has spread makes those headlines easier to interpret.
