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Colombia Peso Extends Monthly Gain as Outlook Improves in European Markets
Colombia’s peso rose, extending a monthly gain, as improved demand for European bonds eased concerns the region might stall a global economic recovery.
The currency gained 0.1 percent to 1,804.9 per dollar at 2:34 p.m. New York time, from 1,807.48 yesterday, extending this month’s gain to 1.2 percent. The peso has rallied 13 percent so far this year, the best performance among all currencies tracked by Bloomberg.
Demand rose at a Portuguese bond sale, and Poland’s auction of five-year debt attracted the strongest bids since 2008. The MSCI World Index of shares rose 0.5 percent while the Dollar Index, which Intercontinental Exchange Inc. uses to track the greenback against the currencies of six major trading partners including the yen and euro, slipped 0.3 percent.
“I see a weaker dollar, and the peso is pretty much trading in line with that,” Katia Diaz, an economist at 4Cast Inc. in New York, said today in a telephone interview. The local market “has been put on hold by the central bank because we’re waiting for an intervention to come for three weeks now, so the peso has been trading in line with what’s going on outside in global markets.”
‘Appropriate’
Central bank chief Jose Dario Uribe said Aug. 20 that the bank will buy dollars in the spot market to ease gains in the peso when “appropriate.”
The yield on the benchmark 11 percent bonds due 2020 rose six basis points, or 0.06 percentage point, to 7.30 percent, according to Colombia’s stock exchange. The bond’s price fell 0.456 centavo to 125.356 centavos per peso.
Colombia’s borrowing costs increased today at a government auction of fixed-rated securities, known as TES.
The yield on Colombia’s bonds due July 2024 rose to 7.45 percent from 7.36 percent on Aug. 25, the Finance Ministry said today in a statement. The yield on the June 2016 bonds increased to 6.65 percent from 6.63 percent, the ministry said.
Annual inflation unexpectedly accelerated to 2.31 percent in August, while consumer prices rose 0.11 percent last month from the previous month. Economists had predicted an annual inflation rate of 2.23 percent, and a monthly rate of 0.02 percent, according to the median estimates of analysts surveyed by Bloomberg.
Demand for the fixed-rate securities sold today equaled 828 billion pesos ($459 million), about 2.6 times the 320 billion pesos offered, the finance ministry said.
To contact the reporter on this story: Nathan Gill in Quito at ngill4@bloomberg.net
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