Colombian Peso Gains as Fed Expands Bond Purchases; Bonds Gain

Colombia’s peso advanced, nearing a two-month high, amid speculation the dollar may weaken after the U.S. Federal Reserve said it will buy $45 billion a month in Treasury securities to help boost economic growth.

The peso gained 0.3 percent to 1,794.82 per U.S. dollar, extending gains this year to 8 percent. It touched 1,793.6 on Dec. 10, the lowest intraday level since Oct. 8.

“More liquidity translates into increased appreciation pressures on the peso,” said Daniel Lozano, head analyst at Serfinco brokerage in Bogota. “The trend is for the peso to continue to strengthen.”

The Fed’s buying plan will be in addition to $40 billion a month of mortgage-debt purchases. Asset buying will continue “if the outlook for the labor market does not improve substantially,” the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington.

The yield on Colombia’s 10 percent debt due in July 2024 fell one basis point, or 0.01 percentage point, to 6.01 percent, according to the country’s central bank. The bond’s price rose 0.054 centavo to 132.622 centavos.

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