The Australian currency closed slightly higher on Monday after Central Bank governor Glenn Stevens gave a clear hint that higher interest rates would likely be needed if the economy accelerates as he expects.

At 1700 AEST, the local unit was buying 94.55 US cents, up from Friday's close of 94.39 cents. On Friday, the Aussie reached 94.70 cents, the highest since August 2008.

Since 0700 AEST, it had changed hands between 93.62 US cents and 94.53 cents.

In a speech in regional Victoria on Monday, Mr Stevens said policy makers would manage what he described as a "robust economic upswing".

"The task ahead is likely to be one of managing a fairly robust upswing. Part of that task will, clearly, fall to monetary policy," he said.

The full effect of RBA's hawkish comment, however, was muted by thin trading condition as Japanese markets were closed for the Respect for the Aged Day public holiday, according to Commonwealth Bank Currency Strategist Joseph Capurso.

The central bank rapidly increased the cash rate, from 3 per cent to its current 4.5 per cent, in six increments between October last year and May.

Mr Capurso said there was also persistent US dollar weakness during the trading day, which contributed to the Aussie rising back above 94 US cents.

According to him, with no significant data due during the offshore session, investors would wait for the US Federal Reserve's interest rate decision on Tuesday.

Analysts predict that the Federal Open Market Committee (FOMC) will hold the rate at its historic low of 0.25 per cent.

However, there is speculation the FOMC's decision could mean a reinvigoration of the Fed's buying of US debt, a tactic adopted during the global financial crisis to lift the supply of money.