This Week: USD Faces Cross-Atlantic Policy Tests

• Geopolitical EU/US trade, Greenland rhetoric adds volatility to USD
• USD tested by central bank signals, key inflation data
• BoJ decision critical for USDJPY; 160.00 triggers intervention talk
• US Core PCE and Canada CPI to set policy tone for EURUSD, USDCAD
• Major global events: China GDP, UK/JP inflation, Davos, earnings

A critical week of inflation data and central bank signals will define the trading narrative for key U.S. Dollar (USD) pairs.

Heightened intervention rhetoric from Japanese officials has added a fresh layer of volatility to the yen, while ongoing US-EU trade tensions and rhetoric over Greenland are injecting a political risk premium into USD dynamics. 

The greenback's performance against the Canadian Dollar (USDCAD), Euro (EURUSD), and Japanese Yen (USDJPY) will be directly shaped by a trio of events spanning North America, Europe, and Asia, testing relative policy expectations.

Events Watchlist:

Monday, Jan 19: Canada Inflation Rate (Dec) – USDCAD

December's Canadian CPI will guide Bank of Canada (BoC) policy bets. A print confirming elevated price pressures could pressure USDCAD toward key support 1.3849, while softer inflation may support a move towards the 1.3961 resistance zone.

Thursday, Jan 22: US Core PCE Price Index (Nov, Oct) – EURUSD

The Federal Reserve's preferred inflation gauge is the main event for EURUSD. A soft reading reinforcing disinflation could lift the pair toward 21-MA, whereas a surprise acceleration may push it toward lower support at 1.1544.

Friday, Jan 23: Bank of Japan Interest Rate Decision – USDJPY

While no change is expected in January, an internal hawkish tilt with April a distinct possibility could drive the pair toward support at the 21-MA. Conversely, a cautious tone emphasizing a patient wait may see it target 160.00. Any sustained move toward that psychologically key 160.00 level is expected to dramatically escalate official intervention rhetoric from Tokyo.

Other major events this week:

Monday, Jan 19

• CNY: China GDP Growth Rate (Q4); Industrial Production (Dec); Retail Sales (Dec); Foreign Direct Investment (Dec)
• CAD: Canada Inflation Rate (Dec); BoC Business Outlook Survey
• US Stock markets are closed today – Martin Luther King, Jr. Day (federal holiday)
• World Economic Forum in Davos (19-23 Jan)

Tuesday, Jan 20

• EUR: Germany PPI (Dec); Germany ZEW Economic Sentiment Index (Jan); Eurozone ZEW Economic Sentiment Index Jan); Spain Balance of Trade (Nov)
• GBP: UK Unemployment Raate (Nov); Average Earnings, Incl. Bonus (Nov, 3Mo/Yr)
• USD: US ADP Employment Weekly Change
• WTI: API Crue Oil Stock Change (w/e Jan 16)
• Earnings: Netflix

Wednesday, Jan 21

• GBP: UK Inflation Rate (Des)
• USD: US MBA 30-Year Mortgage Rate (w/e Jan 16); Pending Home Sales (Dec)
• JPY: Japan Balance of Trade (Dec); Exports (Dec)

Thursday, Jan 22

• AUD: Australia Employment Data (Dec); S&P Global Manufacturing and Services PMIs (Jan)
• NZD: New Zealand Inflation Rate (Q4 2025)
• EUR: ECB Monetary Policy Accounts; Eurozone Consumer confidence (Jan)
• USD: US PCE Index (Oct, Nov); Personal Income and Spending (Oct, Nov)
• JPY: Japan Inflation Rate (Dec)
• WTI: US EIA Crude Oil Stocks Change (w/e Jan 16)
• Earnings: Visa, P&G, Intel

Friday, Jan 23

• GBP: UK Retail Sales (Dec); S&P Global Manufacturing and Services PMIs (Jan); Gfk Consumer Confidence (Jan)
• JPY: BoJ Interest Rate Decision
• EUR: Germany HCOB manufacturing PMI (Jan); Eurozone HCOB Composite, Manufacturing and Services PMIs (Jan)
• CAD: Retail Sales (Dec)
• USD: US S&P Global Composite, Manufacturing and Services PMIs (Jan)