Asian currencies declined on Thursday as Federal Reserve policymakers' pledges to continue rising interest rates despite a moderation in inflation boosted the dollar and a weakening GDP outlook for Singapore also weighed.
The Chinese yuan fell by approximately 0.3%, while the Japanese yen fell by 0.2%. After Wednesday's advances, the majority of other Asian currencies were trading in the red.
The U.S. dollar index increased 0.2% as of 23:21 ET (03:21 GMT), following a 1.1% drop on Wednesday.
Futures on the dollar index rose 0.2% after a similar range of losses.
Reuters reported that Minneapolis Fed President Neel Kashkari stated that while Wednesday's softer-than-anticipated U.S. inflation report was a welcome indication, the central bank would continue to tighten monetary policy until its inflation target is fulfilled.
This could result in the goal rate reaching 4.4% by the end of the year.
While Kashkari is regarded as the most hawkish Fed member, others anticipate that interest rates will continue to climb, albeit at a slower rate.
Traders are currently pricing in a 50 basis-point raise by the Fed at its next meeting, which is lower than their early forecasts of a 75 basis-point hike.
The Singapore dollar dropped 0.1% in Asia as the island nation lowered its annual economic growth prediction from 3% to 5% to 3% to 4%.
The nation also lowered down its GDP estimate for the second quarter, citing heightened headwinds from global economic downturn.
This year, the economy of the mainland has struggled to recover after a series of COVID-19 lockdowns.
The Thai baht remained unchanged after the central bank boosted interest rates on Wednesday and initiated a period of monetary tightening.
The baht has progressively rebounded from this year's lows amidst increasing economic expectations in Thailand.
In addition, the central bank indicated that a modest rate of interest rate increases was required to control excessive inflation.
The decline in oil prices boosted the Indonesian rupiah by 0.5%.
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