How rate rise by the Fed, higher than market expectation will lead to strengthening of Dollar? If the Fed follows through on its forecasts, though, and raises rates faster than markets expect in 2016, the dollar may well rise further, dampening inflation quickly


From : http://www.economist.com/news/finance-and-economics/21679806-first-three-pieces-federal-reserves-imminent-interest-rate-decision

What is the logic behind this? Thanks :)
A higher than expected interest rate in the US would result in a higher than expected interest rate differential with other currencies. This will drag more money to the US as investors will try to benefit from this higher interest rate. Moreover, a faster tightening may create the perception that the Fed is more confident about the economic environment. This good news for the US can translate in dollar appreciation.

An appreciated currency makes imports cheaper, which negatively affects inflation.