Australian dollar weighed by falling oil, greenback strength

A rally in offshore equities and oil price falls after key OPEC oil producers made inroads a freeze in oil production at the record January high weighed on the Australian dollar overnight.

At the Asian open on Wednesday, the local unit was trading at 71.00 US cents, unable to hold Tuesday's gains where it closed at 71.48 US cents. By 0935 local time (AEDT), the Aussie had edged higher to 71.07 US cents, Xinhua reported.

The greenback strengthened overnight against all major commodity currencies as US equities stabilised and while benchmark oil prices fell after key OPEC oil producers Saudi Arabia and Russia agreed to freeze oil production at the record January level, but only if other producing countries agree.

"We still expect the Australian dollar to find support later in the week on encouraging Australian January labour force report," to be released on Thursday, Commonwealth Bank of Australia senior currency strategist Elias Haddad said in a morning note. Market forecast Australia's unemployment to remain steady at 5.8 percent.

"In the lead up to Australia's employment report, general market sentiment and US dollar trends will influence the Australian dollar," Haddad added.