Colombia’s peso fell to a three-week low as weaker-than-forecast U.S. economic data damped optimism that demand for Latin American exports will grow.
The peso dropped 0.6 percent to 1,774.50 per U.S. dollar in Bogota, from 1,763.80 yesterday. It earlier touched 1,775.53, the weakest level since March 7. The loss curbed this year’s advance to 9.2 percent, the biggest gain among major Latin American currencies tracked by Bloomberg.
Durable goods orders in the U.S., the world’s biggest economy, increased 2.2 percent, less than analysts projected, after a revised 3.6 percent decline the prior month, a government report showed today. Demand for the peso has also faded this week after the central bank refrained from raising benchmark interest rates for a third straight month at a March 23 meeting, curbing the allure of the country’s fixed-income assets.
“As rates weren’t increased, investors stop considering the local currency attractive in the short term,” said David Cohen, a strategist at brokerage Ultrabursatiles SA in Bogota.
The central bank held the benchmark rate at 5.25 percent on March 23 after increases at both their January and February meetings. Policy makers kept borrowing costs unchanged as they seek to gauge whether nine interest rate increases in 13 months will be enough to prevent the fastest economic growth since 2007 from stoking inflation.
The yield on the country’s 10 percent peso-denominated bonds due in 2024 rose one basis point, or 0.01 percentage point, to 7.24 percent in Bogota, according to the central bank.
Yields on Colombian peso bonds due August 2026 fell to 7.392 percent at a government auction of fixed-rate securities today. The yield on the bonds declined from 7.42 percent at the last auction on March 14.
Colombia also sold bonds due October 2018 to yield 6.75 percent, down from 6.8 percent, while the yield on the June 2016 securities fell to 6.36 percent from 6.48 percent, the Finance Ministry said in a statement.
Investor demand for the fixed-rate securities totaled 1.32 trillion pesos ($745 million), more than 3 times the 400 billion pesos of debt offered, the ministry said in the statement.