The US dollar is set to soar further after a robust rally in 2022, according to Goldman Sachs. 

Analysts wrote in a note that three factors, including resistant inflation leading to more hawkish tightening from the Federal Reserve, fiscal challenges in the UK, and concerns over financial stability.

The factors mentioned in the note mean that the dollar will stay strong. And even as investors are cautious given "over-tightening risks and foreign intervention," Goldman says that "recent developments have also exposed a growing, and we think the under-appreciated, tail risk that Dollar strength could prove more persistent despite a challenging valuation picture."

The bank pointed to recent developments, which include persistent inflation in the US and a resulting hawkish central bank.

Goldman also noted "the challenging fiscal environment" best exemplified by the UK and the result of "policy missteps" which will add to the dollar's strength. Goldman concluded with growing concerns over global financial stability, which could add to an investor view of the dollar as a safe haven. 

"Of course, lower energy prices would help solve a lot of these problems, and that is the biggest risk in the other direction," the note said.

"But, barring that, we think investors should continue to position for a more persistent Dollar cycle."