By Cecile Lefort
WELLINGTON, Sept 21 (Reuters) - The Australian and New Zealand dollars struggled to make much headway on Monday on falling equities and as markets remained divided on whether the Federal Reserve will raise interest rates before year-end.
The Australian dollar AUD=D4 fell to $0.7167, more than a cent lower from Friday when it briefly climbed to a four-week peak. It was unable to hold gains on renewed worries about global growth and the huge uncertainty surrounding the timing of the first Fed hike.
A top Fed policymaker said a rate hike this year was still likely given the decision to hold steady was a "close call", but some investors were far less convinced about the timing due to pockets of weakness in the U.S. economy and recent turmoil in China's markets.
Still, the Antipodean currencies found some comfort after data from the Commodity Futures Trading Commission showed speculators paring back bullish bets on the U.S. dollar.
"The bulk of the reduction in net USD longs was seen against commodity currencies," said ANZ in a note, adding USD bullish bets against the Aussie were at their lowest in nearly three months, while those against the kiwi dollar fell to a four-month trough.
Trading is Asia is likely to be thinned by a three-day holiday in Japan and the focus this week will likely turn to China and the flash PMI report on Wednesday.
Support was found at Friday's low of $0.7163 and a break would target $0.7125. The Aussie touched a 6-1/2-year trough of $0.6892 earlier this month.
The New Zealand dollar NZD=D4 eased to $0.6376, from $0.6390 late on Friday, having been stuck in a well-defined range of $0.6244 to $0.6458 seen so far this month.
It bounced 1.4 percent higher last week and pulled further away from a six-year trough below 62 cents touched last month.
It managed to pop to a three-week peak last week, but like its Aussie counterpart, ran out of puff after the Fed highlighted uncertainties around global growth.
Also undermining sentiment was more planned job cuts at dairy exporter Fonterra FSF.NZ . The cooperative said it would axe more jobs than previously flagged due to a decline in dairy prices. Dairy is New Zealand's largest export earner.
New Zealand government bonds rose, sending yields around 2.5 basis points lower along the curve.
Two-year yields NZ2YT=RR stood at 2.4 percent, having touched their lowest since 2013.
Australian government bond futures had a firm tone, with the three-year bond contract YTTc1 up one tick at 98.110. The 10-year contract YTCc1 added 4.5 ticks to 97.2400. (Editing by Shri Navaratnam)