Half A Dozen Things You Should Know About FX

1. The market is still digesting the implications of Wednesday's CPI shock. The dollar has strengthened, yields have risen, the stock market wobbled after a long advancing streak, and in any event, stabilized in light trading during the US and Canadian holidays.

2. The dollar's gains accelerated since the higher than expected CPI report. The euro was in a $1.15-$1.17 range last month and broke out on Wednesday. Follow-through selling Thursday brought it to about $1.1445. We have suggested the next target is a little below $1.1300.

3. Disappointing economic data contributed to the losses of the sterling and the Australian dollar.

4. The joint US-China statement at COP-26 is promising. It was the key to the Paris Agreement in 2015.

5. The Mexican peso fell by around 0.5% after the central bank lifted the overnight rate to 5.00%. It is the third quarter-point move in the cycle that began in June.

6. Friday's economic calendar is light. Little new data from the large Asia Pacific and European countries.