As Fed Hawks and Singapore Growth Concerns Weigh, Asian FX Falls!

Asian currencies went down on Thursday because Federal Reserve officials said they would keep raising interest rates even though inflation was going down. This made the dollar go up, and a worsening growth outlook for Singapore also hurt.

The Chinese yuan dropped by almost 0.3%, and the Japanese yen dropped by 0.2%. After making some gains on Wednesday, most other Asian currencies were trading down.

The U.S. dollar index went up 0.2% as of 23:21 ET (03:21 GMT). On Wednesday, it went down 1.1%.

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

Neel Kashkari, president of the Minneapolis Fed, told Reuters that the fact that the U.S. inflation report on Wednesday was lower than expected was a good sign, but that the central bank will keep tightening policy until its inflation goal is reached.

This could cause the target rate to rise to as high as 4.4% by the end of the year.

Even though Kashkari is thought to be the most "hawkish" Fed member, others also think that interest rates will keep going up, albeit more slowly.

The stock market went up after the report, and traders now expect the Fed to raise interest rates by 50 basis points at its next meeting. This is less than what they expected at first, which was a 75-point increase.

In Asia, the Singapore dollar dropped 0.1% after the island state lowered its prediction for annual economic growth from 3% to 5% to 3% to 4%.

The country also changed its GDP number for the second quarter to be lower, saying that the weak economy around the world was making more problems.

Most of these problems come from China, which is Singapore's biggest trading partner.

This year, COVID-19 lockdowns have made it hard for the economy on the mainland to get back on its feet.

The Thai baht stayed the same after the central bank raised interest rates on Wednesday and started a process of making money tighter.

The baht has steadily risen from this year's lows. This is because the Thai economy is getting better.

The central bank also made it clear that inflation was getting out of hand and that rates needed to go up slowly.

The price of oil went down, which helped the Indonesian rupiah, which went up by 0.5%.