Financial data providers report the Colombian peso traded at 4,140.79 per USD Monday morning, showing a notable 0.58% depreciation from Sunday’s closing rate of 4,116.80.
The peso faces mounting pressure from declining oil prices and renewed dollar strength across global markets. Oil prices continued their downward movement with Brent crude opening at $70.85 per barrel this morning.
This extends Friday’s decline when prices settled at $71.04, dropping 0.81% and directly impacting Colombia’s oil-dependent economy. Overnight trading volumes reached approximately $180 million during Asian and European sessions.
Market participants positioned cautiously ahead of this week’s anticipated US inflation data release, which could further influence currency movements.
“The correlation between oil prices and the Colombian peso remains strong this quarter,” noted a senior trader at Bancolombia today. “Every dollar drop in crude translates to approximately 15-20 pips of COP weakness.”
Colombian Peso Weakens to 4,140.79 Against Dollar Amid Global Market Shifts. (Photo Internet reproduction)
Colombian peso-focused ETFs experienced $10 million in outflows on Friday. Dollar-denominated funds attracted equivalent inflows, signaling investor preference for safer assets amid global economic uncertainty.
Colombian Peso Under Pressure
JPMorgan’s emerging market desk reported significant institutional repositioning in their morning note. “We see consistent movement away from high-yielding but volatile currencies like the COP toward USD safety,” they stated.
The USD/COP pair now trades above its 50-day moving average of 4,129.24. Technical analysts identify resistance at 4,170 and support near current levels at 4,140, suggesting limited room for sharp movements.
Market makers observe wider bid-ask spreads of 20-25 pips compared to the typical 15-18 pips. This indicates heightened market uncertainty and reduced liquidity conditions affecting trade execution.
Morgan Stanley highlighted Colombia‘s ongoing fiscal challenges. “Colombia’s fiscal deficit exceeding 5% of GDP continues to concern long-term investors despite attractive 9.50% interest rates.”
Traders monitor upcoming US retail sales data scheduled for release tomorrow. Breaking above 4,170 could trigger a move toward 4,195.73, while support remains at 4,116.61.