AUD/USD eases from 0.6573 with RBA's monetary policy on focus

• The Aussie Dollar trims gains and returns to 0.6560 from intraday highs at 0.6573.
• The RBA is widely expected to keep interest rates unchanged at 3.6% on Tuesday.
• Investors' fears of a potential federal government shutdown in the US have hammered the USD earlier today.

The Aussie Dollar is trimming some gains ahead of the US Session opening on Monday. The pair remains positive for the second consecutive day, but price action has pulled back to 0.6260 from daily highs above 0.6270 earlier today.

Aussie rallies are likely to remain limited ahead of the Reserve Bank of Australia's monetary policy decision, due on Tuesday. The bank is widely expected to leave its benchmark interest rate unchanged at 3.6% but the bank's statement and Governor Bullock's press release will be carefully analysed for hints about the near-term monetary policy and boost Aussie volatility.

Fears of a US government shutdown are weighing on the USD

In the US, all eyes will be on the meeting of US President Trump with the Congressional leaders to avoid a potential Government shutdown on Wednesday. The chances of a last-minute agreement, however, seem remote as the positions of the major parties remain far apart.

Against this background, the hawkish comments from Cleveland Fed President Beth Hammack defending the need for a restrictive monetary policy have hardly impacted the US Dollar.

Hammock warned about the negative impact on the GDP of a potential government closure, but said that inflationary risks remain elevated while the labour market is broadly balanced, which forces the central bank to keep interest rates higher for longer.