(RTTNews) - The dollar slumped to its lowest in almost a month versus the euro Wednesdays morning, extending its recent losses after European officials hinted they would go through with an expanded EFSF without approval from tiny Slovakia.
After Slovakian parliament voted to reject the new sovereign debt bailout fund, Austrian Foreign Minister Michael Spindelegger said that it may still be possible to go ahead with the safety net.
"There are two options," Austrian Vice Chancellor Michael Spindelegger told Bloomberg. "Either we'll do it anyway, and create a rescue program without Slovakia, or we'll have a completely new situation to deal with," he said.
Hopes that banks will be recapitalized in the event of a greek default have lifted the euro during the past week.
The dollar slipped to $1.38 versus the euro, its lowest since mid-September, moving away from last week's 9-month high of $1.3144.
Early losses took the dollar to $1.5780 versus the sterling, down from a yearly peak near $1.5250 set earlier this month.
The buck also came under heavy pressure versus its Canadian counterpart, sliding to C$1.0160.
The U.S. Federal Reserve will be in focus this afternoon.
The FOMC is scheduled to release the minutes of its September 20-21 Federal Open Market Committee meeting at 2 PM ET. The central bank maintained rates unchanged and also announced "Operation Twist", which essentially means using the proceeds from selling short-term securities to buy long-term bonds.
Philadelphia Federal Reserve Bank President Charles Plosser is due to speak on the economic outlook at Wharton in Philadelphia at 1:30 pm ET.
Additionally, Cleveland Federal Reserve Bank President Sandra Pianalto will speak on leadership in challenging times at the University of Akron, Ohio, at 2:15 pm ET.
Minneapolis Federal Reserve Bank President Narayana Kocherlakota is scheduled to speak to Sidney (Montana) Area Business Leaders at 2:30 pm ET.
U.S. mortgage applications edged up last week despite slightly higher interest rates, industry data showed Wednesday.
The group's index of refinancing applications was up 1.3 percent, while the index loan requests for home purchases rose 1.1 percent.
Industrial production in the Eurozone increased unexpectedly in August, data released by Eurostat showed Wednesday. This was the second consecutive increase after a marginal decline in June.
The seasonally adjusted industrial output increased 1.2 percent on a monthly basis in August, following an upwardly revised 1.1 percent rise in July. Economists expected a 0.8 percent fall.
