The Australian and NZ dollars advanced against their major counterparts in the Asian session on Wednesday, as Asian shares are mostly higher following overnight gains on Wall Street, as investors digested Federal Reserve Chair Jerome Powell remarks that rate hikes will be needed to curb inflation.

Powell's comments appeared to be less hawkish than expected, pushing up equities and driving down treasury yields.

Powell said that the Fed is likely to begin the normalization of monetary policy this year, although he didn't give any hint on the timing of the first rate hike.

Powell added that policymakers were still discussing approaches to shrink the Fed's balance sheet and the move could start later this year.

In addition, China's consumer inflation slowed in December, raising hopes for more easing from the People's Bank of China.

The aussie rose to a 6-day high of 0.7223 against the greenback, from a low of 0.7205 hit at 8:15 pm ET. On the upside, 0.75 is possibly seen as its next resistance level.

The aussie climbed to 2-day highs of 1.5746 against the euro, 83.31 against the yen and 1.0632 against the kiwi, up from its prior lows of 1.5776, 83.03 and 1.0616, respectively. The aussie is likely to challenge resistance around 1.54 against the euro, 85.00 against the yen and 1.09 against the kiwi.

The aussie rebounded to 0.9066 against the loonie, after touching a 5-week low of 0.9052 at 9:15 pm ET. The currency may test resistance around the 0.92 region.

Recovering from its previous lows of 0.6780 against the greenback and 78.14 against the yen, the kiwi appreciated to a 1-week high of 0.6797 and 2-day high of 78.39, respectively. The kiwi is seen finding resistance around 0.70 against the greenback and 80.00 against the yen.

The kiwi bounced off from an early low of 1.6767 against the euro, with the pair trading at 1.6732. The currency is likely to test resistance around the 1.66 region, if it gains again.

Looking ahead, Eurozone industrial production for November is due in the European session.

U.S. consumer inflation data and monthly budget statement for December will be published in the New York session.

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