The Australian and NZ dollars depreciated against their major counterparts in the Asian session on Tuesday, as a resurgence in COVID-19 cases in China, the prospects of an imminent Fed rate hike and ongoing conflict in Ukraine sapped risk appetite.

Market participants focused on the Federal Reserve's interest rate decision due out on Wednesday.

The FOMC is expected to hike its benchmark rate by 25 basis points for the first time in three years to control high inflation.

Officials from the United States and China held talks in Rome on Monday and discussed a range of issues including Russia's war in Ukraine.

The White House said that US National Security Advisor Jake Sullivan issued a harsh warning to China saying that it will face significant consequences if it violates sanctions, or aids the war efforts.

A fourth round of talks between Russia and Ukraine ended without a breakthrough on Monday and will continue today in an attempt to end the conflict.

The aussie dropped to a fresh 2-week low of 0.7165 against the greenback and a 5-day low of 84.76 against the yen, off its early highs of 0.7206 and 85.22, respectively. The aussie may find support around 0.70 against the greenback and 81.00 against the yen.

Reversing from its early highs of 0.9236 against the loonie and 1.5178 against the euro, the aussie dropped to nearly 2-week lows of 0.9202 and 1.5302, respectively. The aussie is seen finding support around 0.90 against the loonie and 1.56 against the euro.

The aussie slipped to 1.0644 against the kiwi, its lowest level since January 24. If the aussie falls further, 1.045 is likely seen as its next support level.

The kiwi depreciated to a fresh 2-week low of 0.6729 against the greenback and a 5-day low of 79.41 against the yen, after rising to 0.6756 and 1.6185, respectively in early deals. The kiwi is likely to challenge support around 0.65 against the greenback and 76.00 against the yen.

Pulling back from an early high of 1.6185 against the euro, the kiwi fell to nearly a 2-week low of 1.6306. On the downside, is possibly seen as its next support level.

Looking ahead, German ZEW economic sentiment for March is due out in the European session.

At 8:15 am ET, Canada housing starts for February are scheduled for release.

Canada manufacturing sales for January, U.S. PPI for February and New York Fed's empire manufacturing survey for March are set to be released in the New York session.

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