The Australian dollar has fallen slightly as global risk appetite softens.

At 0700 AEDT on Wednesday, the local unit was trading at 90.17 US cents, down from 90.26 cents on Tuesday.

Bank of New Zealand strategist Kymberly Martin said risk appetite, while still solid, had weakened slightly overnight, pushing the Australia dollar down.

“Equity markets are a very good indicator of risk appetite and both in Europe and the US, share markets were pretty flat,” she said.

“The S&P 500 was unable to return to Monday’s highs. Risk appetite is solid but certainly nothing significant.”

She said the Aussie dollar was expected to trade within a narrow range.

The Aussie, US stocks and gold prices rallied on Tuesday following increased global appetite for riskier assets.

In local economic news, the Australian Bureau of Statistics will release construction activity for the December quarter at 1130 AEDT.

AP