THE Australian dollar was weaker late yesterday as markets grew nervous about the risks of a further weakening in the US economy, while fresh concerns have emerged about China. On Friday, the US non-farm payrolls report showed 80,000 jobs were added in June, lower than the 100,000 average forecast by economists polled by Dow Jones Newswires. The unemployment rate was unchanged at 8.2 per cent. On Sunday, China's Premier Wen Jiabao was reported to have said the Chinese economy was running at a generally stable pace, but still faced "huge pressure to go downward". CMC Markets currency strategist Tim Waterer said the Australian dollar was facing mounting headwinds, especially as investors appeared to be gravitating to the relative safety of the US dollar. With more data from China due out this week, the Aussie should remain vulnerable, he said. "With a raft of further Chinese data due this week, traders are apprehensive about taking on board higher-yielding currencies for fear the data may point to Chinese weakness in the second half of 2012," he said. At 5pm AEST, the dollar was trading at $US1.0191, down US0.65c from Friday's close. China yesterday reported that its annual inflation rate had slowed to a 29-month low of 2.2 per cent in June, from 3 per cent in May. Over the month, inflation fell by 0.6 per cent, after a 0.3 per cent slide in May. Economists said the data showed there was little impediment for the Chinese government to further stimulate the economy. "Today's China CPI suggests that inflation is not standing in the way of further policy easing, but this is already built into market expectations," said Robert Rennie, senior currency strategist at Westpac.

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