Interest rate hikes enacted to fight inflation also raise a currency in the forex markets. (Because holding said currency gives you relatively better yield vs before the hike.)

A currency is a tool of the economy controllable by a central bank, not a competition (otherwise everyone would d shoot for high deflation).

> Look at the price of Yen to USD.

The instantaneous exchange rate between two currencies does not give any information about the strength or weakness of the economies that operate on those currencies.