On Thursday, the National Association of Realtors is expected to report that existing home sales slipped to 4.95 million -- the lowest reading since record-keeping began in 1999.

Strong CPI results could propel AUD/USD higher as the markets may ramp up speculation that the RBA will move to hike rates in February, while most other central banks are reducing interest rates.

The BOC will likely follow the US Federal Reserve’s lead and make monetary policy more accommodative, which may spark major volatility in the nation’s bond, FX, and equity markets.

If UK retail sales data proves to be better than expected, the news could lead Cable to trek higher. Moreover, with aggressive rate cuts by the Bank of England already priced into GBP/USD, the declines may be overdone and the pair could respond more severely to slightly bullish economic figures.

Australian labor market data could propel AUD/USD higher, and if the employment change is actually stronger-than-expected, the markets may ramp up speculation that the RBA will move to hike rates.

On Wednesday, US CPI could propel EUR/USD higher, with losses for the dollar, especially if the figures soften in line with or more than forecasts.

Tuesday's US Advance Retail Sales report could lead to losses for the dollar, especially if the figures are disappointing and spark more pessimistic sentiment on the markets, as analysts judge that the US economy may already be in recession.

There are signs that declines for the currency pair may be slowing, though a continuing decline may depend more upon whether the markets ramp up their bets that the BOE will opt to cut rates in February.

Given the sharp drop seen in Ivey PMI, the December labor market readings could be quite disappointing and may lead traders to ramp up speculation that the Bank of Canada will cut rates on January 22.

Two major central bank decisions are scheduled to be released, and the results could have a large impact on the markets, particularly in FX.