By Swati Pandey
SYDNEY, Feb 22 (Reuters) - The Australian dollar fell again on Thursday and its New Zealand cousin was on track for a fifth straight day of weakening as the greenback extended gains amid bolstered expectations of at least three rate hikes in the United States this year.
The Aussie AUD=D4 slipped to $0.7792, inching closer to a 1-1/2 week trough of $0.7759 earlier this month. Technical analysts see strong chart support around $0.7760.
The currency is down more than 3 percent this month after strong gains in December and January.
The New Zealand dollar NZD=D4 eased to a one-week low of $0.7307. It was last flat at $0.7312.
The antipodean currencies have had a golden run since late 2017, largely on the back of solid investor appetite for risky assets and as the greenback stumbled to multi-year lows.
But the prospect of a more aggressive U.S. Federal Reserve has helped reverse the dollar's slide. Important to market expectations was minutes of the Fed's last policy meeting, released on Wednesday, which highlighted hopes of faster economic growth due to fiscal stimulus.
In particular, members agreed that "the strengthening in the near-term economic outlook increased the likelihood that a gradual upward trajectory of the federal funds rate would be appropriate."
That led investors to narrow the odds on faster hikes with a host of Fed fund futures 0#FF: hitting contract lows. Three rate rises are now almost fully priced in for this year, compared to two as recently as December.
"If one were to split hairs, one could argue that these statements only imply increased confidence in the need for the three 2018 hikes," said JPMorgan (NYSE:JPM) analyst Jesse Edgerton.
"But we think increased confidence in the need for further hikes will accompany a perceived need for more than three hikes among a growing portion of the committee," he added. "We thus remain comfortable with our forecast for four hikes in 2018."
In contrast, the Reserve Bank of Australia (RBA) has hammered home the point that interest rates in the country were set to remain at record lows for a long time.
The futures market implies around a 40 percent chance of a rate rise by August 0#YIB: and is not fully priced for a move of 25 basis points to 1.75 percent until early next year.
The policy outlook is similar in New Zealand, where the central bank has indicated a first move might not come until mid-2019.
New Zealand government bonds 0#NZTSY= eased, sending yields 2.5 basis points higher at the long end of the curve.
Australian government bond futures were mixed, with the three-year bond contract YTTc1 up 1 tick at 97.865. The 10-year contract YTCc1 fell 1.5 ticks to 97.1300. (Editing by Richard Borsuk)