Asian currencies fall as Fed hawks and Singapore growth concerns weigh!

Asian currencies slumped on Thursday as Federal Reserve officials pledged to keep raising interest rates despite a slowing in inflation, while Singapore's GDP outlook deteriorated.

The Chinese yuan fell about 0.3%, while the Japanese yen fell 0.2%. After seeing some gains on Wednesday, most major Asian currencies were trading in the red.

The US dollar index was up 0.2% as of 2321 ET (0321 GMT), after falling 1.1% on Wednesday.

After a similar range of losses, dollar index futures were up 0.2%.

While Wednesday's softer-than-expected US inflation report was a welcome sign, Minneapolis Fed President Neel Kashkari stated that the central bank will continue to tighten policy until its inflation objective is fulfilled, according to Reuters.

This might push the target rate up to 4.4% by the end of the year.

While Kashkari is often regarded as the most hawkish Fed member, others believe interest rates will continue to rise, albeit at a slower pace.

Following the announcement, stock markets rose, with traders now pricing in a 50 basis-point raise by the Fed at its next meeting, down from original estimates of a 75-point boost.

The Singapore dollar declined 0.1% in Asia as the island state reduced its annual economic growth prediction from 3% to 5% to 3% to 4%.

In addition, the country reduced its second-quarter GDP estimate, citing heightened headwinds from global economic downturn.

The majority of these headwinds come from China, Singapore's top commercial partner.

The mainland economy is still battling to recover from this year's COVID-19 lockdowns.

The Thai baht was unchanged after the central bank boosted interest rates on Wednesday, kicking off a period of monetary tightening.

The baht has progressively rebounded from this year's lows, as the Thai economy improves.

The central bank also said that a gradual increase in interest rates was required to counteract excessive inflation.

The rupiah in Indonesia climbed 0.5% as oil prices fell.

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