Colombian Peso And Stocks Stay Strong As Global Dollar Firms

The Colombian peso is still trading near three-year highs while Bogotá’s equity rally pauses just below records.

Early Thursday, USD/COP hovered around 3,710–3,720, only marginally below Wednesday’s close and far from the 3,900–4,000 range that dominated much of 2025.

The extension of yesterday’s move reflects a market still backed by high real interest rates and better-than-expected growth, even as the fiscal deficit is projected near 6.7% of GDP and the sovereign remains below investment grade.

Banco de la República’s 9.25% policy rate keeps Colombia one of the higher-carry stories in emerging markets. Globally, the dollar index is back above 100, trading around 100.2 after several days of gains as investors trim expectations for rapid Federal Reserve rate cuts.

U.S. futures tick higher after strong Nvidia earnings calmed some AI-bubble worries, but broader emerging-market sentiment remains cautious and Latin American currencies have mostly moved sideways to weaker this week.

Technicals still favour the peso. On the daily chart, USD/COP trades well below its 50-, 100- and 200-day moving averages and close to the lower Bollinger band, with RSI in the low-30s and MACD negative.

The four-hour chart shows a gentle rebound from oversold territory, with RSI lifting into the 40s and MACD flattening, suggesting room for brief dollar bounces inside a broader downward trend channel.

Bogotá’s MSCI COLCAP index closed Wednesday near 2,061, down about 0.5% on the day and roughly 1% under last week’s record high. Financials and utilities led the pullback, while selected industrial and energy names continue to post new peaks.

Even after this pause, COLCAP remains up more than 40% in 2025, keeping Colombia among Latin America’s top-performing markets.

Offshore positioning broadly confirms that story. The Global X MSCI Colombia ETF trades around $37, near its 52-week high, with powerful 12-month returns but only modest net flows in recent weeks after heavy inflows earlier in the year.

Colombia rally holds but volatility risk lingers

As one research note put it, Latin America’s equity surge, led by Colombia’s near-50% jump, is drawing in fresh attention but elections and policy shifts “keep volatility in play.”

On the charts, the COLCAP’s daily structure remains clearly bullish: prices hold well above rising 50- and 200-day moving averages, with an up-trend line from the April lows now near 1,840.

RSI has cooled from overbought into the high-60s, and four-hour MACD is rolling over from elevated levels. A pullback toward the 2,020–2,040 area would still look like a normal consolidation unless the index breaks decisively below 2,000.

For now, Colombia offers a rare combination: a currency near multi-year highs, a stock market at or near records, and a still-generous real-rate cushion.

That mix leaves peso and equity valuations sensitive to swings in the global dollar and U.S. policy expectations—but firmly on the radar of investors hunting carry, value and growth in the same market.

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