Forex - Dollar trims gains as euro firms up ahead of Slovak vote

Forex News – The U.S. dollar trimmed gains against its major counterparts on Tuesday, as the euro found support amid hopes that Greece will receive its next tranche of aid and ahead of a finely balanced vote by Slovakia’s Parliament on expanding the powers of the euro zone’s bailout fund.

During U.S. morning trade, the greenback was lower against the euro, with EUR/USD inching up 0.08% to hit 1.3589.

Slovakia was to be the last of the euro zone's 17 members to vote on a deal to enhance the size and powers of the European Financial Stability Fund but deep divisions within the government on the issue provoked tensions among investors ahead of the vote.

But the euro found support after officials from the European Union, International Monetary Fund and European Central Bank said Greece was likely to receive its next tranche of financial aid, possibly in early November, after Eurogroup and IMF officials approve the results of their review.

Meanwhile, the greenback was up against the pound, with GBP/USD shedding 0.47% to hit 1.5592.

Earlier in the day, official data showed that manufacturing output in the U.K. grew at the slowest rate in 18 months in the year to August, adding to concerns over a slowdown in U.K. growth.

The greenback was almost unchanged against the yen but posted gains against the Swiss franc with USD/JPY inching up 0.01% to hit 76.67 and USD/CHF adding 0.33% to hit 0.9068.

Elsewhere, the greenback was higher against its Canadian, Australian and New Zealand cousins, with USD/CAD rising 0.31% to hit 1.0291, AUD/USD slipping 0.12% to hit 0.9977 and NZD/USD shedding 0.24% to hit 0.7819.

In Canada, official data released earlier showed that housing starts rose more-than-expected in September.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was fractionally higher, easing up 0.07% to hit 77.91.

Also Tuesday, outgoing European Central Bank President Jean-Claude Trichet said the region's debt crisis had reached "a systemic dimension" and that risks to the economy were increasing rapidly.