AUD/USD extended its decline in Monday's session as market gears up for RBA decision. Federal Reserve's projection of higher interest rates continues to bolster the USD. Australian and American economic calendars remain empty on Monday. The Australian Dollar experienced additional losses against the US Dollar on Monday as markets gear up for Tuesday’s Reserve Bank of Australia decision.
Market sentiment – whether investors are taking on more risky assets or seeking safe-havens – is also a factor, with risk-on positive for AUD. How do the decisions of the Reserve Bank of Australia impact the Australian Dollar? The Reserve Bank of Australia influences the Australian Dollar by setting the level of interest rates that Australian banks can lend to each other. This influences the level of interest rates in the economy as a whole.