By JESSICA MEAD Worries about China and the outlook for commodity prices weighed on the Australian dollar Thursday, even as other major currency pairs stayed in tight ranges ahead of Friday's annual economic symposium in Jackson Hole, Wyo., and the European Central Bank monthly meeting next Thursday. The Australian dollar has struggled over the past three weeks, falling Thursday to near $1.03 from above $1.06 on Aug. 9, with currency strategists attributing the latest weakness to the continued plunge by iron ore spot prices to a three-year low and pessimistic comments from the Chinese steel sector—both of which are crucial to Australia's exports and economy. "There has been a buildup of pessimistic momentum about China, which has caused the underperformance of the Australian and New Zealand dollars," said Michael Sneyd, currency strategist at BNP Paribas in London. "Asian equities have underperformed, commodity prices have underperformed. All of this reflects that pessimism about China is pretty much priced in now. There is scope for a rebound." As the Australian dollar struggled against the greenback, the euro remained stuck in a tight range against the dollar around the $1.2550 mark. The euro inched higher on a reassuring Italian bond auction, which saw the Italian treasury sell the maximum targeted amount for the 2017 and 2022 Treasury bonds with lower borrowing costs than at previous similar auctions. The currency market has been in a stupor because of a wait-and-see attitude among traders awaiting Federal Reserve Chairman Ben Bernanke's speech at Jackson Hole and the ECB meeting. Antje Praefcke, a currency strategist at Commerzbank, said expectations that Bernanke would announce further bond purchases Friday and hopes that the ECB will revive its bond-buying program at its meeting have supported the euro. She warned that these two pillars of support for the euro—which is close to its strongest levels against the dollar since early July—might begin to shake when Bernanke speaks tomorrow, as strong expectations about his likely policy suggestions have already been priced in to key exchange rates. Elsewhere, the pound had edged lower after mixed July lending data, which indicated that mortgage lending and approvals rose, but borrowing on credit cards fell. In Europe's emerging markets, Poland's zloty weakened against the euro after figures showed that the country's growth in the second quarter of 2012 slowed to 2.4% from 3.5% in the first quarter, significantly missing expectations of 2.9% growth. The euro climbed to as high as 4.1976 against the zloty from 4.1777 late Wednesday. In the session ahead, the key numbers that traders will be focusing on are U.S. personal income data for July and weekly jobless claims, both at 1230 GMT. Also of note is a speech by ECB Executive Board member Jörg Asmussen at 1800 GMT. The euro was trading at $1.2540 against the dollar in the European morning, compared with $1.2530 late Wednesday in New York, according to trading system EBS. The dollar was at ¥78.63 against the yen, compared with ¥78.71, while the euro was at ¥98.63 compared with ¥98.62. The pound was trading at $1.5826 against the dollar, compared with $1.5832 late Wednesday in New York. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of currencies, was trading at 71.01, compared with 71.04 late Wednesday in New York. —Dow Jones Technical Strategist Francis Bray contributed to this article. Write to Kosaku Narioka at kosaku.narioka@dowjones.com

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