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Launceston,Tasmania-where to stay?

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My adult daughter and I are traveling through Tasmania for two weeks in March and we are planning on spending 2/3 days in Launceston while doing a circle loop of the country. We are interested in seeing the geology of the area along with enjoying the wineries and sites of the area.
I am somewhat confused as to whether we should be actually staying in Launceston or outside of the city. Does anyone have suggestions as to where would be a great place to stay to enjoy the city? Thanks for your help!

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