Colombia Peso Leads Emerging-Market Gains on U.S. Payrolls Data

  • Currency strengthens 1.4% to highest in almost two weeks
  • Peso volatility is among the highest emerging markets

Colombia’s peso led a rally in emerging-market currencies as disappointing U.S. jobs data spurred speculation the Federal Reserve will wait longer to raise borrowing costs, delaying an exodus of capital from nations with higher interest rates.

The peso jumped 1.3 percent to 3,022 per dollar at 11:40 a.m. in Bogota, reaching the strongest in almost two weeks as it posted the best performance among 24 currencies from developing countries. A gauge of 20 developing-nation currencies gained after U.S. payrolls increased less than projected in September while wages stagnated and the jobless rate was unchanged.

Colombia’s currency is gaining more dramatically than its counterparts after the tender plunged 33 percent in the past 12 months amid a decline in oil prices, one of the worst performances in emerging markets, according to Juan David Ballen, a strategist at Casa de Bolsa, the brokerage unit of Colombia’s biggest banking group. One-month implied volatility for the peso is the third-highest in emerging markets as traders push back expectations for the first U.S. interest rate increase since 2006.

“The peso’s weakening this year has been extensive, so the market uses these types of days as an excuse to take a break,” Ballen said from Bogota.

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