Colombia Peso Advances as U.S. Hiring Report Buoys Risk Demand

Colombia’s peso rose the most in seven weeks, tracking gains in global markets, after a report that showed American companies increased hiring boosted the outlook for global growth and buoyed demand for higher-yielding assets.

The peso climbed 0.7 percent to 1,768.80 per U.S. dollar, from 1,780.68 yesterday. That’s the biggest increase since Jan. 18. It has advanced 8.7 percent in the past three months, the best performance among emerging-market currencies tracked by Bloomberg.

Companies in the world’s biggest economy added 216,000 workers last month, according to a private report by ADP Employer Services. The median estimate in a Bloomberg News survey called for a 215,000 increase. The U.S. buys about 40 percent of Colombia’s exports, making it the South American country’s top trading partner.

“The peso is following external markets today,” said Lucia Duarte, a currency strategist at Bancolombia SA, the nation’s biggest bank. “The ADP report is giving tranquility to the market, which helps risk appetite.”

Dollar Purchases

The peso will likely continue trading this month within a range of 1,767 and 1,791 as the central bank’s daily dollar purchases reduce volatility in the currency market, Duarte said. She forecasts the peso will end this month at 1,783.

In a bid to ease gains in the peso, Banco de la Republica said Feb. 24 it will extend a program of daily purchases of a minimum of $20 million to at least Aug. 4, from the initially announced minimum three-month period.

BNP Paribas SA closed out bets the peso will weaken toward 1,830 amid a “favorable” balance of payments outlook and increased dollar holdings by local banks, strategists Diego Donadio and Thiago Alday wrote in a report today.

Increased dollar inflows as companies buy pesos to pay local taxes may help push gains in the Colombian currency in April, Donadio and Alday wrote. Policy makers may take further measures to ease gains in the currency should it rise beyond 1,750, they wrote.

Yields on Colombia’s 10 percent peso-denominated debt due in July 2024 fell two basis points, or 0.02 percentage point, to 7.22 percent, according to the central bank. The price rose 0.182 centavo to 122.1780 centavos per peso.

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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