A currency’s value relative to others also links to interest rates. When the Fed increases interest rates to control inflation, it may increase the demand for foreign investment since returns become higher.
When interest rates are higher, it’s less appealing for prospective homebuyers to take out a mortgage because their monthly payments will be higher. Less demand for houses should theoretically mean that house prices fall (assuming that supply remains around the same).
Higher interest rates could be one reason (among many more) why the stock market has declined since the start of 2022, and it may mean the trend is likely to continue – at a minimum we can expect some big swings in prices and volatility.