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SYDNEY, Nov 28 AAP

November 28 2012, 12:57AM

The Australian dollar is lower as markets focus on renewed concerns over the `fiscal cliff' of upcoming tax hikes and spending cuts in the US.

At 1200 AEDT on Wednesday, the currency was trading at 104.45 US cents, down from 104.80 US cents on Tuesday afternoon.

The currency lost ground overnight after US Senate Majority Leader Harry Reid warned little progress had been made in talks between Democrats and Republicans trying to avoid the `fiscal cliff'.

The parties are trying to find a way to bring down the budget deficit without allowing the automatic tax hikes and spending cuts, which could cause a recession in 2013, to go ahead.

Easy Forex senior currency dealer Francisco Solar said markets were again focusing attention on the US, after spending the past few days watching a key meeting of euro zone finance ministers, which resulted in the release of bailout funds for Greece.

He said speculation the Reserve Bank of Australia (RBA) will cut the cash rate in December, was also a focus for markets.

"The Aussie now reverts its attention to the upcoming RBA meeting and the US fiscal cliff issues," he said.

"We've gone from one risk event to another which is probably more pressing."

The RBA kept the cash rate on hold at 3.25 per cent in November.

Meanwhile, Australian bond futures prices were higher at noon.

At 1200 AEDT on Wednesday, the December 10-year bond futures contract was at 96.865 (implying a yield of 3.135 per cent), up from 96.785 (implying a yield of 3.215 per cent), on Tuesday.

The December three-year bond futures contract was trading at 97.330 (2.670 per cent), up from 97.270 (2.730 per cent).