Investors will be looking at another slow week ahead. The Bank of Canada's monetary policy meeting stands out. The markets are currently expecting the BoC to announce an interest rate hike this week. However, there is an equal chance that the BoC could disappoint market expectations.

On the economic front, inflation theme continues this week. The UK will be releasing its latest inflation data for the month of December. Following the previous BoE meeting to hike interest rates, consumer prices showed no signs of easing. Latest PMI figures for December suggested that prices at factory gate continued to rise.

Australia will be reporting on its monthly jobs data this week as well. The Australian unemployment rate was seen at 5.4% in November, stable for nearly two months. In November, the Australian economy was also seen adding over 61.6k jobs during the month.

Economic data from the U.S. takes a backseat this week with only the building permits data and the weekly unemployment claims standing out. Forward-looking indicators such as the Philly Fed Manufacturing index will be coming out alongside the UoM's consumer sentiment and inflation expectations data.

Here's a quick recap into this week's economic calendar for the currency markets.

Bank of Canada – Interest rate hike expected

The Bank of Canada will be meeting this week for its first monetary policy meeting. The market consensus is for the BoC to hike interest rates at this week's meeting. The hawkish view comes on the back of a solid rebound in the Canadian labor market and other indicators pointing to an increase to tighter conditions.

However, at the same time, the BoC had left interest rates unchanged at the December meeting. The BoC took a very cautious stance at the previous meeting and cited various risks to the economy that included the exchange rate as well as the NAFTA deal that brought about a certain level of uncertainty for the policymakers.