Colombia Peso Rebound Seen on Dollar Buying End: Market Reversal

Colombia’s peso is poised to rebound from its biggest tumble in a year as policy makers consider whether to extend a dollar purchase program that ends this month, trading patterns show.

The 14-day relative strength index of the exchange rate rose yesterday to 83.3, the highest since September 2011, as the peso tumbled 3.1 percent against the dollar in two weeks, the most of any South American currency tracked by Bloomberg. A level above 70 implies an imminent reversal. The currency broke through 1,900 per dollar yesterday for the first time in 16 months, prompting Finance Minister Mauricio Cardenas to declare the depreciation “a great achievement.”