Colombian Peso Pauses After Rally As Bogotá Stocks Extend Remarkable Run

The Colombian peso is catching its breath after one of the strongest rallies in emerging markets, even as local equities continue to surge.

Around Tuesday morning, USD/COP was trading near 3,757, just below today’s official TRM of 3,764.77 and roughly 15% stronger than a year ago.

Friday’s session marked the first real jolt to that trend. After briefly dipping below 3,700 for the first time since 2022, the dollar jumped to 3,764.92 on heavy volume of roughly $1.1 billion, making the peso one of the weakest performers of the day.

Traders pointed to profit-taking and growing speculation that the government’s programme of dollar sales – about $4.1–5.3 billion so far – is nearing its limits.

Without that constant supply, the one-way appreciation story looks less assured. A holiday on Monday kept onshore trading quiet, while offshore desks held the pair in a tight 3,750–3,755 band.

Globally, the dollar index edged up toward 99.5 as investors scaled back hopes of a rapid Federal Reserve pivot and digested weaker U.S. equity markets, adding a mild headwind for high-beta currencies.

Fundamentally, the peso still enjoys support from relatively high local rates, easing inflation and a more orthodox macro stance than many regional peers.

But markets are wary of the impact of the looming minimum-wage debate and any extra spending promises. Today’s third-quarter GDP release, expected near 3% year-on-year, will be a key test of confidence.

Technically, daily charts keep USD/COP in a clear downtrend, though oversold readings and a flattening MACD suggest the move is stretched.

On four-hour charts, RSI has recovered into the low-50s and momentum has turned slightly higher, pointing to a consolidation phase within roughly 3,74x–3,80x.

Equities tell a more exuberant story. The MSCI COLCAP closed Friday at 2,071.23, up 0.96% and about 50% higher year-to-date, helped by tame yields and renewed interest from both local pensions and foreign funds ahead of this month’s index rebalance.

Recent top winners include Fabricato, Grupo Éxito, Banco de Occidente, preferred Davivienda and Grupo Sura. On the downside, CNEC, ENKA and grid operator ISA have lagged.

With the index technically overbought and the currency no longer a one-way bet, investors are now watching whether policy stays predictable enough to turn Colombia’s strong run into something more durable.

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