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Dollar rebounds


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The Australian dollar has been pushed back above 88 US cents by stronger-than-expected Chinese gross domestic product data.

Early Tuesday, the Australian dollar was trading at 88.03 US cents, up from 87.79 cents on Monday.

China’s economy grew 7.7 per cent last year, according to official figures, beating economists’ expectations of 7.6 per cent.

“While the data shows China’s economy losing momentum towards the end of the year, the slowdown was not as large as economists had feared,” BK Asset Management managing director Kathy Lien said.

“There’s no escaping the reality that China is losing its mojo, but this is part of their plan to focus on domestic growth and structural reforms over the next five to 10 years.

“The only upside is that the slowdown is gradual, which is apparently enough to trigger a relief rally in the Australian/US dollar.”

While currency traders keep aneye of forex markets, a new player has had another success; Salt Lake City-based says it’s the first major retailer to accept digital Bitcoins as payment for goods.

The $US1 billion ($A1.14 billion) company is tapping into a new market of buyers who use the online currency, and other major retailers will lose market share if they don’t follow suit and accept Bitcoins, Overstock chief executive Patrick Byrne said.

“I’ve been hearing from people all over the world – cult followers of Bitcoin – who say they are going to shift all of their shopping to,” Byrne told CBS affiliate KUTV in Salt Lake City.

Bitcoin users buy digital money and load it on to a virtual wallet. They can buy things online without having to enter their credit-card information.

Unlike government-issued money, the value of Bitcoin fluctuates rapidly. To protect itself, Overstock uses a Bitcoin broker that immediately transfers the digital coin into dollars.

Overstock started accepting the virtual currency on January 9, and Byrne said the company almost immediately grossed $US100,000 in Bitcoin orders.

“You’ll see Amazon jump on board. You’ll see other large companies – they have to because they cannot concede this whole section of the market to us,” Byrne said.

The cyber currency has existed for years as a kind of internet oddity, counting supporters among tech-savvy libertarians, currency geeks and online speculators. Yet increasing acceptance is bringing it into mainstream use.

Bitcoins are created, distributed, and authenticated independently of any bank or government.

The currency’s cryptographic features make it virtually immune from counterfeiting, and its relative anonymity holds out the promise of being able to spend money across the internet without fear of governments.

The linchpin of the system is a network of “miners” – high-end computer users who supply the Bitcoin network with the processing power needed to maintain a transparent, running tally of all transactions.

The tally is one of the most important ways in which the system prevents fraud, and the miners are rewarded for supporting the system with an occasional helping of brand-new bitcoins.

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