The Swiss franc eased against the US dollar in early trade on Thursday as the dollar got a boost from better-than-expected US consumer sentiment for December.
The consumer confidence index as measured by the Conference Board, a private business group, rose by more than what economists expected on Wednesday and helped cushion the dollar against selling pressure spurred by surprisingly strong data on German consumer sentiment.
The dollar last traded around 1.3146/49 francs versus 1.3137/42 late in Europe on Wednesday. The euro was trading at 1.5577/79 francs from 1.5573/78 francs.
But thin trading conditions and a lack of interest to hold big positions as the year-end nears, kept volumes light.
"We expect foreign exchange markets to become more directional only once liquidity is back for good, ie upon the return of more market participants at the beginning of 2006," UBS said in a note.
However, traders are awaiting Switzerland's KOF indicator for December, due to be released on Friday. It is expected to be a focal point for the market as dealers calculate the outlook for borrowing costs and economic growth into the new year.
The leading indicator is expected to set fresh 5-year highs with a reading of 1.17, according to the median of a Reuters poll, as business sentiment improves amid a general upturn in the Swiss economy.