ZURICH, Oct 12 - The Swiss franc was off recent lows versus the dollar on Friday but still weak as stronger U.S. stocks and a relative semblance of normalcy in the world political arena left the dollar to drift near one-month highs. Some traders said the franc could make some headway against the dollar on Friday if recent market behaviour continues to favour the franc as a safe-haven currency. Such demand tends to peak ahead of the weekend.
Since the September 11 attacks in the United States, the franc's highs have tended to be hit ahead of the weekend, as uncertain investors seek a currency perceived as safe to ride out any storm which may arise when most markets are closed on Saturday and Sunday.
But one Swiss-based trader said that the safe-haven demand for the franc now appeared relatively modest despite the start of U.S.-led attacks against Afghanistan last Sunday, and this could also mean the safe-haven demand is slowing.
"The impact on the Swiss franc was not as great as expected at the start of the week. There hasn't been major any volatility," said one trader.
He did not rule out an increase in Swiss franc demand this Friday. But based on recent events, investors did not appear to expect any quick change in the situation, and this could lessen such demand in today's session, he said.
On Friday at 0630 GMT the franc was slightly higher than Thursday's late levels, but still sharply lower against the dollar compared with early Thursday's early levels.
The U.S. unit had gained around two centimes on Thursday, a large move amid optimism that the U.S. economy may be regaining its footing after the September 11 attacks.
The dollar gains came amid a rise in U.S. stock prices and news of a slight drop in U.S. weekly jobless claims, which led the dollar to an intraday high of 1.6522 francs, the highest level for the U.S. unit since September 14, when it was as high as 1.6595.
The dollar still remains below the 1.6870-franc level where it closed on September 10, the day before the attacks in the United States.
The euro was meanwhile virtually unchanged against the franc.
The dollar was down at 1.6450/55 francs compared with 1.6480/86 francs late on Friday. Those levels were still much higher than 1.6280/90 francs in Thursday's early business. The euro was virtually unchanged at 1.4845/50 francs, a bit lower than 1.4852/57 francs late on Thursday but scarcely changed from 1.4840/50 francs early on Thursday.