The Australian dollar is higher despite the U.S. government shutdown.

At 7am AEST, Sept 30, the Australian Dollar is trading at 93.21 US cents, up from 93.08 cents, as reported by The Australian.

The local currency continued to climb in the evening after swelling at 2:30 pm AEST, Oct 1, as reported by Investing.com.

The Reserve Bank of Australia affirmed that the AUD is rising. However, the bank decided to leave the cash rate unchanged at 2.5 per cent as of its Oct 1 announcement.

"The Australian dollar rose recently, but is still about 10 per cent below its level in April. A lower level of the currency than seen at present would assist in rebalancing growth in the economy. At today's meeting, the Board judged that the setting of monetary policy remained appropriate. The Board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target," RBA stated in its official announcement.

The U.S government financial year ended Sept 30 (2pm AEST, Oct 1). However, failure for its Congress to pass legislation to fund the government caused the controversial U.S. government shutdown.

In an interview with The Australian, OM Financial Senior Client Adviser Stuart Ive explained that the U.S. dollar plummeted against the major currencies in overnight trade. He explained that the U.S. government shutdown caused 0.1 per cent detraction from December quarter economic growth.

"The Aussie dollar managed to stay pretty strong against the US dollar. We're going to be very sensitive to any news about a partial closure of the government or if some emergency legislation gets passed. It becomes a growth story and that's why there's weakness coming into the US dollar,'' he said.

However, ForexCT Head of Research Steven Dooley warned that the Australian dollar might dip lower when the U.S. recovers from its shutdown.

"The Aussie dollar's rally is pretty impressive considering there is a lot of selling pressure and expectation that there is going to be a terrible blow to confidence if the US government does shut down," Mr Dooley told the AAP.

"The US recovery and the global recovery seems to be ticking back into gear, so this is the worst possible time for this to happen. We expect the Aussie dollar to drift lower and equity markets to also drift lower ahead of that news," Mr Dooley added.