Why Is The Dollar Strong? Is It Good For The Dollar To Be Strong?The dollar has risen dramatically this year as the Federal Reserve raised interest rates in an effort to combat sky-high inflation. The US Dollar Index, which compares the US currency to a basket of other currencies, is up more than 17% this year. So, why is the dollar strong?From its low in May 2021, the US dollar has surged rapidly, registering a 14% gain (at its most recent peak) against a large basket of currencies. In comparison to important currencies like the euro, the pound, and the Japanese yen, it is currently near its best levels in decades.