The New Zealand dollar is the best performing currency against the greenback on Wednesday, with the exchange rate rallying to a high of 0.6746, while the Japanese Yen pared the overnight advance and weakened across the board following a shift in market sentiment. The New Zealand dollar is the best performing currency against the greenback on Wednesday, with the exchange rate rallying to a high of 0.6746, and the high-yielding currency is likely to face increased volatility going into the Asian trade as the Reserve Bank of New Zealand is widely expected to raise its benchmark interest rate to 2.75% from the record-low of 2.50%. The NZD/USD is nearly 70pips higher from the open after moving 85% of its ATR, but the advance could taper off throughout the day as price action fails to break above the 10-Day SMA at 0.6752. Nevertheless, as risk trends continue to dictate price action for the major exchange rates, the rise in market sentiment paired with expectations for a RBNZ rate hike could push the kiwi-dollar towards the 20-Day SMA at 0.6792 as the pair appears to have carved out a near-term bottom ahead of 0.6550.

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