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SYDNEY, Nov 28 AAP

November 28 2012, 07:19AM

The Australian dollar is lower following falls on US stock markets.

At 0700 AEDT on Wednesday, the currency was trading at 104.48 US cents, down from 104.80 US cents on Tuesday afternoon.

The Australian dollar rallied on Tuesday after euro zone finance ministers agreed to unlock loans to Greece and admitted that some of the country's debt burden will eventually have to be written off.

But, BK Asset Management managing director Kathy Lien said, weakness on US stock markets pushed the Australian dollar lower overnight.

"Basically, the sell-off in US stocks is weighing on the Australian dollar," she said from New York.

At 0700 AEDT New York's Dow Jones was 0.56 per cent lower while the S&P 500 was down 0.39 per cent.

Ms Lien said the weakness in US stocks was most likely due to negative sentiment surrounding negotiations between Republicans and Democrats trying to avoid the `fiscal cliff' of tax hikes and spending cuts due to automatically take effect in early 2013.

She expected the Australian dollar to remain weak during Wednesday's local session.

"I think it will remain heavy and could fall as low as 104 US cents," she said.