Colombian Peso Gains on Dollar Amid Tariff Fears and Oil Surge

TradingView’s 1-hour chart on May 8, 2025, at 07:16 UTC reveals the USD/COP pair at 4,283.0. The chart shows a 0.00% change, with the price consolidating after a sharp drop.

On May 7, the pair fell from 4,316 to 4,270, driven by a stronger peso. The price broke below the Ichimoku Cloud, signaling bearish momentum.

The 50-period SMA crossed below the 200-period SMA, confirming the downtrend. RSI at 40 indicates neither overbought nor oversold conditions, suggesting room for movement.

MACD shows a bearish crossover, with the signal line above the MACD line, hinting at continued downward pressure. Bollinger Bands tightened around the 20-period SMA, reflecting low volatility overnight.

Support holds at 4,270, while resistance looms at 4,290 within the Ichimoku Cloud. Volume appears low, typical for early Asian and European sessions, indicating trader caution.

Fibonacci retracement places the 38.2% level at 4,288, aligning with resistance. A break above 4,290 could target 4,316, but a drop below 4,270 might hit 4,250.

Oil prices likely fueled the peso’s rise, as Colombia benefits from crude exports. Prices softened recently, but major producers maintain aggressive output, pressuring budgets like Saudi Arabia’s $15.6 billion deficit.

U.S. tariffs under Trump, at 145% on Chinese imports, stir global trade fears. Federal Reserve Chair Powell noted on May 7 that tariff effects remain unseen, with rates unchanged, adding uncertainty.

Colombia’s central bank possibly hiked rates to fight inflation, supporting the peso further. Geopolitical tensions ease slightly, but Trump’s tariff threats loom large. China exempted some U.S. goods from its 125% tariffs, aiming to calm tensions.

Meanwhile, Colombia eyes a potential EU trade deal, which could boost exports. However, U.S. tariffs on emerging markets worry traders, potentially reversing peso gains.

Global growth forecasts dip, with the OECD cutting eurozone GDP to 1.0% for 2025, citing trade disruptions. ETF flows into Colombian assets likely grew, reflecting investor confidence in the peso’s rally.

Yet, global equity markets remain shaky, losing $10 trillion since April due to tariff fears. Traders await Colombia’s Q1 GDP data today, which could sway the pair.

A strong report might push USD/COP lower, while U.S. jobless claims could lift the dollar if positive. The USD/COP pair sits at a critical point, balancing oil-driven peso strength and global trade uncertainties.

Technical indicators lean bearish, but upcoming data will decide the next move. Traders watch closely, navigating a tense market landscape.