Peso Rebounds Toward 3,800 As Colombia’s Red-Hot Economy Meets Market Caution

The Colombian peso is trading around 3,800 per dollar this morning after a sharp rebound from sub-3,700 levels earlier in November.

That still leaves the dollar roughly 15% weaker against the peso year-to-date, but the move back toward 3,80 represents a 3% pullback from recent lows.

The adjustment comes as the U.S. dollar index hovers just above 100 and 10-year Treasury yields ease to about 4.06%.

Thursday’s on-shore session was brisk, with about USD 1.4 billion changing hands and an intraday range between roughly 3,770 and 3,824.

The official TRM for today, 3,741.27, reflects that volatility. Traders point to Bogotá’s latest eurobond issue—whose proceeds will be used to buy back debt rather than sold in the spot market—as removing a source of dollar supply that had previously supported the peso.

Stronger-than-expected third-quarter GDP growth, at 3.6% year-on-year, and a still-restrictive 9.25% policy rate keep Colombia near the top of the EM pack in terms of real yields and growth.

Inflation, back up to about 5.5%, and a fiscal deficit projected near 6.7% of GDP argue against early rate cuts.

Peso Rebounds Toward 3,800 As Colombia’s Red-Hot Economy Meets Market Caution

Markets have taken some comfort from signs that a contentious tax bill, which would raise levies on capital gains and gasoline, may be shelved in the Senate, even as they worry about how the budget gap will be closed without deeper spending cuts.

Technically, USD/COP remains in a downward trend on the daily chart, with a bounce from support around 3,730–3,750 and resistance clustered near 3,820–3,850.

On the four-hour chart, momentum indicators are overbought, suggesting room for consolidation rather than a clean trend reversal.

Equities mirror that “strong but tired” story. The MSCI Colcap closed near 2,034 points, up 0.24% and only a few percent below recent records, after a year in which the benchmark has surged about 44% in pesos and more than 60% in dollars.

Among the day’s biggest gainers were Grupo Bolívar, Corficolombiana and Celsia, while Terpel, Davivienda preferred shares and ISA led the losers.

The four-hour Colcap chart now shows cooling momentum after a steep autumn rally, but the daily and weekly trends remain firmly higher—conditional on growth staying strong and fiscal policy avoiding heavier, confidence-sapping tax experiments.

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