The New Zealand dollar declined against its major counterparts on Tuesday, as investors awaited the Federal Reserve's policy meeting that is set to deliver a large rate hike this week.

The Fed begins its two-day meeting later today and will conclude on Wednesday.

Markets are fully pricing in a 75 basis point rise in rates, although Fed funds futures show a slight chance of a full-point move.

Investors expect the fed funds rate to rise to 4.5 percent by early next year.

Apart from the Fed, market participants will focus on central bank meetings in Japan, U.K. and the Switzerland.

The kiwi touched 0.5917 against the greenback, a level unseen since April 2020. The kiwi is likely to face support around the 0.56 level.

The kiwi weakened to 84.92 against the yen, its lowest level since September 2. On the downside, support is seen near the 81.00 level.

The kiwi dipped to 1.1332 against the aussie, setting a 6-1/2-year low. If the kiwi extends drop, 1.15 is possibly seen as its support level.

The kiwi dropped to 2-1/2-month low of 1.6919 against the euro, down from an early high of 1.6796. The kiwi may locate support around the 1.73 level.

Looking ahead, Canada inflation data and U.S. building permits and housing starts, all for August, will be released in the New York session.

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