Even though there is general optimism as we start the week, Brexit uncertainty is starting to weigh on the pound as Theresa May sets a date for parliament to vote on her deal. The Federal Reserve’s likely rate hike is the highlight of the week.

Votes on votes on votes

The parliamentary Brexit deal vote originally set for last week will be held the week of January 14, according to U.K. Prime Minister Theresa May, who addressed parliament Monday. May is still facing more threats of a no confidence vote.

Last week, members of her own pushed through a vote of no confidence in her party leadership, but May easily won that among Conservative Party members on Wednesday evening.

Labour party leader Jeremy Corbyn addressed parliament after May on Monday, lambasting her work on the Brexit deal with the E.U. Corbyn earlier threatened a vote of no confidence if a specific date for a vote on the deal wasn’t set today.

The week will likely be volatile even if a no confidence vote is or is not called. There is also talk of a second Brexit referendum (a public vote on leaving the E.U.), which May has publicly opposed saying the British people have already spoken.

The GBP/USD pair dropped slightly to 1.260 after May addressed parliament.

Fed rate Wednesday

The Federal Reserve is set to raise interest rates for the fourth time this year on Wednesday as it holds its final FOMC monetary policy meeting of the year.

The FOMC is expected to raise interest rates from 2.25% to 2.5%, despite some recent data showing a slight slowdown in the economy and commentary from Fed members on pausing rate hikes in 2019.

The dollar will likely rise on the rate increase, but the commentary from Chairman Jerome Powell during his press conference as well as the FOMC’s statement will be the real deciding factors in how the dollar performs. A dovish statement and more indications of a rate pause in 2019 will likely result in the greenback losing.

Canadian inflation Wednesday

The consumer price index – a measure of inflation – is set to be released Wednesday, as well as the Bank of Canada’s CPI measurement.

Inflation is expected to fall to 1.9% growth YoY for November from 2.4% the prior month.

The USD/CAD pair has been fluctuating greatly as of late, with oil prices playing a major role as well as strong retail data out of Canada.

The pair has climbed from 1.207 at the beginning of September to around 1.340 today.

Other factors for the week

The Bank of England is set to help a monetary policy meeting on Thursday and it’s expected to hold interest rates steady.

While there may be no rate change, any commentary on the current Brexit situation and the bank’s outlook could move the sterling. On Friday, we’ll round out the week with U.S. GDP numbers for Q3.