The Swiss franc ticked lower early on Wednesday as the United States slowly gathered its forces in the wake of hurricane Katrina but uncertainty about the global economy continued to dominate markets. Implications from the storm on the steady tightening policy at the US Federal Reserve remain unclear.
"We expect the volatilities on the forex markets to remain comparably elevated as market participants appear to have rather diverging views on what is to come next from the global economy," UBS said in its daily market bulletin.
Worries about a sustained, dramatic impact on oil prices from Katrina appeared to be fading as refinery operations recovered and oil prices extended losses on Wednesday.
The dollar last traded at 1.2373/76 Swiss francs, up from 1.2360/65 francs in late trading in Europe on Tuesday. The euro stood at 1.5441/43 francs from 1.5426/31 francs on Tuesday.
US light crude fell 29 cents to $65.67 a barrel after a $1.61 drop on Tuesday. London Brent crude shed 33 cents to $64.34 in electronic trading.
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