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The Australian dollar was on the defensive against a firm US dollar on Thursday as strong Chinese data augured well for Aussie commodity exports but also raised the risk of further tightening there. The Aussie was hovering around $0.9131, having edged up from a two-week low of $0.9073 hit overnight but remains well below the week's high of $0.9263.

The Aussie fell sharply on Wednesday as some feared China's steps toward tightening could eventually slow both its economy and global demand. Yet so far, analysts say China's actions have been modest and aimed at heading off bubbles rather than reining in growth.

"China's data is a positive for Australia because growth will continue to be strong and we expect longer commitments from China to their infrastructure investment growth cycle," said Patrick Bennett, Asia FX and rates strategist at Societe Generale in Hong Kong.

Copyright Reuters, 2010


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