The Australian dollar is weaker as a plunge in the Russian rouble hit risk sentiment.

At 0700 AEDT on Wednesday, the local currency was trading at 82.10 US cents, down from 82.31 cents on Tuesday.

The unit slipped after the Russian central bank’s decision to raise interest rates, from 10.5 per cent to 17 per cent, failed to stop the rouble from going into freefall.

Bank of New Zealand strategist, Kymberly Martin, said the drop in the Russian currency to record lows hit demand for risk driven currencies like the Australian dollar.

“It was just weighing on market sentiment overnight,” she said from Wellington.

“Currencies like the Australian dollar, the New Zealand dollar, tend not to do very well when there’s heightened risk aversion.”

Subsequently, commodity prices fell with the Brent crude oil price dropping below $US59 a barrel for the first time since May 2009.

AAP