How the Stock Market Is Shaped by the US Dollar and International Conflicts
The stock market does not move in a vacuum in the ever-changing world of investing. It responds quickly to global developments and macroeconomic factors. The two most significant of these are changes in the value of the US dollar and global conflicts, including Middle East wars or tensions between superpowers. When combined, they cause tremors, occasionally waves, in the world's financial markets. The U.S. dollar's influence in international markets In addition to being the currency of the United States, the U.S. dollar (USD) is the reserve currency of the entire world. It has a significant impact on investor confidence, commodity price, and international trade. Commodities like gold and oil, emerging markets, and multinational firms are all impacted when the dollar rises or falls. Principal Impacts on the Stock Market: A strong dollar hurts American exporters but helps industries that rely heavily on imports. Outflows from emerging markets may also be triggered by it. A weak ...
