The Australian dollar is higher as the currency continues to extend gains following the release of strong Chinese data.

At 0700 AEST on Monday, the local unit was trading at 91.91 US cents, up from 91.40 cents on Friday.

The Australian dollar received a boost on Friday with positive inflation, retail, manufacturing, and mining data from China, said ANZ senior manager FX in Auckland Sam Tuck.

“Industrial production was stronger than expected which added to the contained consumer price index reading, which was one-tenth lower than expectations, and stronger export data from the day before,” Tuck said.

“Also, the market was probably running very short.

“The Aussie was gaining against absolutely everything, really, so it seems to have been an Aussie story and an Aussie buy.”

China’s industrial production growth accelerated in July to a five-month high of 9.7 per cent year-on-year, the Chinese government said, against an expected nine per cent gain.

Industrial production, which measures output at factories, workshops and mines and is a key indicator for the world’s second-largest economy, also increased 9.4 per cent over the first seven months of this year.

Figures also showed that Chinese inflation had held steady at 2.7 per cent year-on-year in July, potentially giving authorities some leeway for economic stimulus.

AAP