The Australian and NZ dollars weakened against their major rivals in the European session on Wednesday, as the West prepared to impose more sanctions on Russia and a Fed official remarked that the central bank is prepared to raise rates aggressively and start trimming the balance sheet from next month.

European stocks fell following hawkish comments from Federal Reserve Governor Lael Brainard overnight, which called for a series of interest rate increases and rapid reductions to the balance sheet to reduce inflation pressures.

The Fed minutes due later today could offer more clues about the pace of rate hikes and balance sheet reduction.

The European Commission proposed a potential ban on coal imports from Russia in its latest package of sanctions following civilian atrocities in Ukraine.

The U.S. is preparing sanctions to restrict all new investment in Russia and also target financial and state-owned bodies, some officials and oligarchs.

The aussie declined to 1.4496 against the euro and 93.21 against the yen, off its prior highs of 1.4339 and 94.14, respectively. The aussie may find support around 1.49 against the euro and 89.00 against the yen.

Reversing from its early highs of 0.9490 against the loonie and 1.0922 against the kiwi, the aussie edged down to 0.9417 and 1.0874, respectively. The aussie is poised to challenge support around 0.92 against the loonie and 1.06 against the kiwi.

The aussie retreated from a prior high of 0.7593 against the greenback and touched a 2-day low of 0.7534. Next key support for the currency is seen around the 0.72 level.

The kiwi fell to a 2-day low of 0.6924 against the greenback, after gaining to 0.6967 in previous deals. On the downside, 0.66 is possibly seen as its next support level.

The kiwi slipped to 1.5764 against the euro and 85.71 against the yen, from its prior highs of 1.5636 and 86.31, respectively. The kiwi is seen challenging support around 1.60 against the euro and 82.00 against the yen.

Looking ahead, the Fed minutes from the March 15-16 meeting are set for release at 2:00 pm ET.

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