Month/Quarter end flow to provide.............>

FOREX: Month/Quarter end flow to provide direction.

- GBP has been the biggest mover in Europe with the rest all playing catch up in

tight ranges. Early USD sales saw Gbp/Usd print $1.4096 but was quick to pare

gains. RHS Eur/Gbp fixing demand (0700GMT) for the third day running saw the

cross lift to Gbp0.8765, the move pressured Gbp/Usd to extended pullback lows of

$1.4035. Despite a narrowing current account deficit (Headline Q4 GDP in-line),

GBP holds heavy ahead of NY.

- Saxony kicked off the German state CPI's on the soft side, further misses from

Hesse & Brandenburg (Bavaria & Rhine in-line) briefly took Eur/Usd under $1.2300

but lacked follow through.

- Usd/Jpy continued its corrective pullback off Asia traded highs (Y106.93) to

Y106.40, before dip buyers cushioned to hold Y106.55/65.

- Antipodeans lacked direction largely held to narrow 20 pip ranges.

- Month/Quarter-end flow again expected to dictate price action. US data at

1230GMT from Jobless Claims, Personal Income/Spending, MNI Chicago PMI follows

at 1345GMT.