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Strong Australian dollar poses economic danger

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Uploaded on May 10, 2011

It's a country that appears to have defied the global financial crisis, enjoying years of consecutive growth and a soaring currency.

But it's not all "wonder down under" for Australia's economy, and as the government prepares to deliver its budget, there could be tougher times ahead.

Despite a commodities-fuelled boom, high government spending, the cost of widespread flooding and a drop in corporation taxes ,mean cuts are likely.

But out of direct control of the government is Australia's soaring currency. For the first time since it floated, recent weeks have seen the Australian dollar worth considerably more than its American equivalent: and that's hurting exporters.

Andrew Thomas reports from Sydney.

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