The Australian and NZ dollars dropped against their major counterparts in the Asian session on Tuesday, as Asian stocks followed Wall Street lower amid concerns about higher inflation.

Investors fear that a surge in inflation could prompt the Fed to tighten policy sooner than expected.

The Labor Department will release its latest U.S. CPI data on Wednesday, which is expected to show a rise of 3.6 percent over the year in April.

U.S. inflation expectations soared to the highest in a decade as the economy recovers from the pandemic and on the Fed's accommodative policy.

Data from Statistics New Zealand showed that New Zealand retail credit card spending climbed a seasonally adjusted 4.0 percent on month in April - after rising 0.8 percent in March.

Spending in the core retail industries climbed 4.1 percent on month.

The aussie weakened to 4-day lows of 0.7822 against the greenback, 1.5518 against the euro and 0.9467 against the loonie, off its early highs of 0.7845, 1.5471 and 0.9487, respectively. The aussie is poised to challenge support around 0.75 against the greenback, 1.57 against the euro and 0.93 against the loonie.

The aussie hit a session's low of 85.14 against the yen, after rising to 85.42 at 10:35 pm ET. The aussie is seen finding support around the 82.00 mark.

The aussie retreated to 1.0772 against the kiwi, from a high of 1.0792 hit at 9:15 pm ET. The aussie may locate support around the 1.06 level.

The NZ currency slipped to 4-day lows of 0.7252 against the greenback, 78.97 against the yen and 1.6724 against the euro, reversing from its early highs of 0.7277, 79.23 and 1.6676, respectively. The next possible support for the kiwi is seen around 0.70 against the greenback, 76.5 against the yen and 1.69 against the euro.

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