[20:11 GMT January 16]

GBP/USD reversed course and fell during the US session on
relief that UK CPI did not breach the 3% ceiling that would have prompted
Governor King to have to explain the price jump to Chancellor Brown. Heavy
profit-taking in GBP/JPY was noted by a Russian account today which helped knock
cable back below the 1.9600 level, triggering stops. That same account had been
a cable buyer earlier in the day. A bounce to 1.9640 unfolded after wire reports
of an evacuation on Capital Hill, but prices quickly pulled back when it was
revealed the evacuation was linked to a broken pipe and not a terror-scare.
1.9590 held on two attempts. Stops are eyed above 1.9640 near-term.
Looking ahead to Wednesday, dealers will closely eyed the UK unemployment
figures for signs of wages pressures, a key component in the BOE”s recent
concerns. Some wage settlements still linked to the RPI-X and that index surged
even more than CPI this morning. Average earnings are seen climbing at a 4.2%
annual rate in November. US industrial production and TIC data are highlights
tomorrow. IP is seen up 0.1%. Anything over $60 bln on TIC will be okay.
Jamie.Coleman at Thomson.com /rs