Why is the Dollar so Strong? Why is the USD the Strongest?Except for the US dollar, almost every asset class in 2022 has experienced dismal returns. The Federal Reserve raised interest rates throughout the year in an effort to combat the sky-high inflation, which resulted in a significant strengthening of the dollar. This year, the US Dollar Index, which compares the dollar to a basket of other currencies, has increased by more than 17%. So, why is the Dollar so strong?