By Cecile Lefort and Swati Pandey
SYDNEY/WELLINGTON, Nov 5 (Reuters) - The New Zealand dollar was nursing hefty losses on Thursday, and its Australian peer trimmed recent gains after Federal Reserve officials stoked expectations of a December rate hike.
The Australian dollar slid to $0.7137, having shed around one full cent from a peak touched on Wednesday. Support was found at the double bottom of $0.7105 with major chart resistance at $0.7225.
The New Zealand dollar NZD=D4 suffered the most, having touched a one-month low of $0.6574 overnight to be last at $0.6583. Support was found at $0.6566 and a break under would bring 65 cents in focus.
The kiwi has dropped 2.6 percent this week and, if sustained, it would be the biggest weekly loss since early September.
Part of the weakness came after Fed Chair Janet Yellen laid out what now appears the base case at the U.S. central bank - the country is ready for higher interest rates.
Her comments were later backed by another Fed official who "completely agreed" that December was a live possibility for raising interest rates.
The kiwi was already on shaky footing after a weak jobs report and falling dairy prices added to the case for another rate cut by the Reserve Bank of New Zealand at its Dec. 10 meeting.
In contrast, the market has pushed back expectations of an easing by the Reserve Bank of Australia after it skipped the chance to cut earlier in the week. Interbank futures 0#YIB: imply a 22 percent chance of a move in December, from 72 percent earlier in the week.
In a generally optimistic speech, Reserve Bank of Australia (RBA) Governor Glenn Stevens said on Thursday the economy was making progress in shifting away from mining-led growth and that very accommodative monetary policy was likely to stay for some time yet.
All that supported the Aussie against its kiwi cousin. It has leapt NZ four cents this week to as far as NZ$1.0882. It was last at NZ$1.0830.
The Aussie stood tall against the euro which skidded to a 2-1/2-month trough of A$1.5138, to be last at A$1.5210.
A spike in U.S. Treasury yields sent Australian government bond futures to multi-week troughs, with the three-year bond contract off 4 ticks at 98.090. The 10-year contract fell 4.5 ticks to 97.1950, while the 20-year contract shed 3.5 ticks to 96.6450.
New Zealand government bonds also eased, with yields 2 basis points higher along the curve. (Editing by Richard Pullin)