In this paper we study the effect of diffraction on the performance of a miniaturized moving-optical-wedge interferometer. By using the Gaussian model, we calculate the degradation of the interferometer visibility due to diffraction effects. We use this model to optimize the detector size required to obtain maximum visibility and study its effect on resolution of Fourier transform spectrometers based on a moving-optical-wedge interferometer. A comparison between these effects in Michelson and wedge interferometers is also presented showing the advantage of the moving-optical-wedge interferometer in suppressing the diffraction effects with respect to the Michelson interferometer.