Colombia’s peso rose to a four-month high as oil, the nation’s biggest export, gained and on speculation European officials will advance plans to tackle the region’s debt crisis.
The peso climbed 0.6 percent to 1,813.80 per U.S. dollar, from 1,823.90 on Jan. 20. Earlier it touched 1,807.53, its strongest level since Sept. 12. The peso has jumped 6.9 percent in 2012, the best performance among all currencies tracked by Bloomberg.
“There’s a lot of news expected to come out this week and markets remain pretty optimistic,” said Camila Estrada, the head analyst at Bogota-based Helm Bank SA. “Gains in commodities are also helping Latin American currencies,” including the peso, she said.
European Union finance ministers are meeting today in Brussels to discuss new budget rules, a financial firewall to protect indebted states and a Greek debt swap. French Finance Minister Francois Baroin said negotiations between Greece and its private creditors are making “tangible progress.”
Global leaders, including European Central Bank President Mario Draghi and German Chancellor Angela Merkel, are scheduled to gather in Davos, Switzerland, this week to discuss tackling the crisis without depressing the economy.
Oil, which accounts for about 40 percent of Colombia’s exports, rose as the EU announced a phased-in embargo of Iranian crude in an effort to contain the Islamic Republic’s nuclear program.
Growing foreign investment into Colombia, especially in oil, will keep spurring gains in the peso, according to Estrada.
Foreign-direct investment jumped 58 percent in 2011 to a record $15 billion, with 81 percent going into oil and mining, according to trade balance data from the central bank.
The yield on Colombia’s 10 percent bonds due in July 2024 was little changed at 7.38 percent, according to the stock exchange.