The Australian dollar tumbled from highs on Wednesday as a surprisingly sharp slump in Chinas exports pointed to weaker demand for Australias key commodity products. The Aussie pulled back to $0.6427 from a high of $0.6494, but remained up on $0.6386 seen here late Tuesday.
The decline wiped out most of the Aussies gains offshore when comments from Citigroup that it was profitable in the first two months this year lifted world markets. "The export numbers caught people off-guard and markets are well and truly disappointed," said Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. "Investors are taking it as a bad sign for the world economy and there is a flight to quality," Cavenagh said.
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