ZURICH, Sept 13 - The Swiss franc was steady against the dollar and the euro in early Thursday trading and dealers saw a quiet session as the market responded to appeals for calm after Tuesday's terror attacks on the United States. The U.S. Federal Reserve appealed to the market to keep dollar trading to a minimum on concerns about the settlement of dollar transactions following heavy infrastructure damage to New York, the heart of the U.S. financial system.
"I think it will be the same as Wednesday, with people doing only small amounts of business for customers. The Fed has said the market shouldn't trade too much in dollars and most of the market is dollar-related," a Zurich dealer said.
The international financial markets association, the ACI, has also asked banks to refrain from unnecessary trading activities in the wake of the first attacks on U.S. soil since Pearl Harbor, almost 60 years ago.
"People don't want to trade," the dealer said.
By 0555 GMT, the dollar was at 1.6594/02 francs, little changed from 1.6605/15 in late business on Wednesday, but up from 1.6390/10 early on Wednesday.
The euro was at 1.5049/54 francs, little changed from 1.5046/51 late on Wedneday, but up from 1.5011/13 early on Wednesday.
The European Central Bank, the Swiss National Bank, the Bank of Japan and the U.S. Fed all moved to add liquidity to the financial system on Wednesday.
Traders said the market was now waiting to see how the U.S. administration and its allies would respond to the attacks which destroyed the World Trade Center and damaged the Pentagon. Thousands were feared dead.
President George W. Bush on Wednesday called the attacks "acts of war" against the United States.
"If there is retaliation, that would probably be positive for the franc, although the dollar could benefit as well. But is very difficult to see what will happen, and who they will actually retailiate against," said a dealer in Geneva.
If the attacks dampen consumer sentiment and tip the United States into recession, this would be a negative for the dollar, dealers said.