Colombian Peso And Stocks Ride Official Dollar Sales As Markets Eye Turning Point

Colombia woke up today to a slightly softer dollar and an equity market grazing record highs, capping a stretch in which official policy, rather than organic growth, has done much of the heavy lifting.

The official TRM for Wednesday is 3,806 pesos per dollar, almost unchanged on the day, with spot early in the session trading just above 3,800 after briefly testing 3,820 on Tuesday.

Globally, the backdrop remains supportive for risk. US and European indices advanced and the dollar index slipped to about 99.7 as investors priced in a December rate cut from the Federal Reserve.

Lower US yields would normally push the greenback down gently, but in Colombia the move is being amplified by the government’s own strategy.

Market estimates suggest the Finance Ministry has sold close to $6 billion in FX through derivatives and bond operations since September, helping the peso appreciate roughly 13.5% this year and pulling USD/COP down from above 4,400 into the current 3,700–3,800 band.

Strategists now warn that once those politically driven sales slow, weak fiscal fundamentals and an under-funded 2025 budget could reassert themselves.

Technical signals echo that tension. On the daily chart, USD/COP remains in a clear downtrend, with RSI only just back above 50 after weeks near oversold levels and MACD still below zero.

The four-hour chart shows a bounce from 3,750 toward resistance near 3,830, where momentum is already fading. Traders see a short-term range consolidating here, but volatility risk rising once policy support recedes.

Equities, meanwhile, are feasting on strong local liquidity. The MSCI Colcap jumped 1.73% on Tuesday to 2,034 points, near October’s record, on turnover above 312 billion pesos.

Top winners included ISA (+3.2%), Promigas (+1.4%), Cementos Argos (+0.8%), the Colcap itself and the peso, which has outperformed most regional peers.

On the losing side stood Nutresa (-3.9%), Davivienda preferred (-2.7%), Grupo Bolívar (-2.2%), the US dollar index and the dollar against the peso, both down year-to-date.

For now, Colombia offers high carry and a roaring stock market. The open question for investors is how long those gains can survive once policy makers stop leaning so heavily on the scales.

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