The near-term direction of the broad USD could be influenced by a surprisingly soft reading in rental inflation, which was flat in November compared to the previous month. The Bureau of Labor Statistics revealed that it couldn’t collect accurate inflation data during October and November 2025, indicating potential upside risk to Tuesday’s readings. This could be a steadying factor for the USD.

Additionally, high frequency indicators suggest consumption is buoyant, which could lead to strong retail sales on Wednesday. However, in light of a mixed jobs report this week, Fed speak will take center stage ahead of the FOMC blackout this Saturday. It’s worth noting that Treasury Secretary Bentsen indicated the replacement for Chair Powell could be revealed shortly before the World Economic Forum in Davos (19 to 23 January).

Other developments to watch include the US Supreme Court, which will hear more opinions on Wednesday regarding the administration’s emergency tariffs. It’s unclear if a ruling will be made. As always, it’s a matter of trying to gauge the USD’s next moves.