The Australian dollar has drifted lower against a stronger greenback as the Malaysia Airlines crash weighs on risk appetite.

At 0700 AEST on Tuesday, the local currency was trading at 93.74 US cents, down from 93.92 cents on Monday.

Markets had begun recovering from last week’s plane crash in eastern Ukraine but the ensuing diplomatic tensions with Russia had reignited market jitters, ANZ senior manager FX in Auckland Sam Tuck said.

“The US dollar strengthened overnight. We had a bit of negative risk sentiment over the Malaysia Airlines incident,” Tuck said.

“That had been reversed on Monday morning but it picked up again with the diplomatic stuff going on.”

US President Barack Obama has said Russian President Vladimir Putin should be held “directly responsible” for ensuring the crash site is made available to international investigators.

Meanwhile, the UN Security Council has unanimously endorsed an Australian resolution demanding “safe, secure, full and unrestricted access” to the crash site for international investigators.

The main event for the Australian dollar on Tuesday will be a speech by Reserve Bank governor Glenn Stevens.

“RBA governor Stevens is giving his annual address to the Anika Foundation, comments from last year’s speech caused the Australian dollar to fall about 1.2 cents,” Tuck said.

“He has been on the wires very recently expressing his desire for the Australian dollar to be lower so it’s pretty hard to see that that speech would have an Aussie optimistic tone.

“There’s probably a reasonable threshold for decent Aussie dollar declines on that.”

AAP