Question

How do fluctuations in U.S. interest rates impact foreign markets?

Answer 1

Higher interest rate say in Japan(lol) than the U.S. would cause a demand shift for Yen over dollars. The value of Yen would rise, and the dollar would fall. U.S. goods would then become cheeper for Japaneese citizens than previously were, and Japaneese good would be more expensive for U.S. citizens. Japan would import more from the U.S. and export less, the U.S. would export more and import less from Japan.

Answer 2

Normally if the interest rates are lower than those compared to another country the stocks will climb in the US because the cost of capital is lower. Bonds will rise in the other country because the ar paying a higher return for your investment because the rate to borrow is higher in that country.