The USD reversed most of its early gains......>

FOREX: The USD reversed most of its early gains against the majors as US Tsy

yields edged lower overnight, which countered the early USD uptick.

- AUDUSD's high from Dec 12 (0.7580) acted as support as the AUD edged lower in

immediate reaction to a slightly softer than exp. headline domestic CPI figure,

although both the weighted median & trimmed mean measures were 0.1% higher than

expected, with the cross recovering to trade unchanged at ~0.7605 as a result.

- NZD remains under pressure through AUDNZD cross flows. Both of the Antipodean

currencies were trading softer heading into Australian CPI, but the ensuing

bounce in the AUD (on the back of the slightly stronger than expected core

measures of inflation) has seen the AUDNZD print session highs of ~1.0680, while

NZDUSD last trades 25 pips or so softer at ~0.7120 vs. lows of 0.7115.

- USDJPY trades around 108.80 as Japanese insurers continue to push the pair

higher, while sources note that exporters remain side-lined for now. Cable &

EURUSD followed the broader USD swings, with both of the crosses last trading

around unch., while USDCAD lost around 10 pips to trade at 1.2840. Tuesday's

focus will fall on German IFO, US new home sales & a speech from ECB's Villeroy.