For those traders who are hoping for the tides to calm in the coming week, they will have to continue hoping because the economic calendar is filled with market moving data.

Equities have stabilized and traders are becoming less risk averse, reducing the need for a large follow-up move by the Fed.

If we are truly in a recession as many economists argue, then the dollar could actually strengthen. Kathy Lien notes that, of the seven major currencies, the safest one to park your dollars in, is USD/CAD.

The volatility in the financial markets caused panic at the Federal Reserve, resulting in the first intermeeting rate cut since 2001.

Dow futures fell 546 points. If they do not retrace materially before the market’s open on Tuesday and the Dow closes the day down by the amount that the futures suggest, the index would see its fourth largest point loss ever.

Although Kathy Lien does not believe that the US dollar has hit a bottom, she would not be surprised to see a bounce in the dollar this coming week.

The manufacturing index fell to the lowest level in over 6 years. Rate cut expectations are favoring 75bp of easing, and the Federal Reserve is likely to deliver exactly what the market prices in.

The US dollar recovered against every major currency, and stronger economic data has curbed expectations for a 75bp rate cut.

Retail sales and producer prices both contracted in the month of December, but the dollar did not weaken across the board.

If consumer spending actually falls in the month of December, then not only is a 50bp rate cut from the Federal Reserve guaranteed, but so would a rally up to 1.50 in the EUR/USD.