The Colombian peso remains under pressure against the dollar, driven by both internal and external factors. Domestically, Colombia’s trade balance recorded a deficit.
Imports grew by 4.4%, meanwhile, exports fell by 1%, highlighting a concerning divergence. This persistent scenario of growing trade deficits adds downward pressure on the peso.
Externally, the dollar rebounded after three days of losses, due to the renewed concerns about the economic policies of the Donald Trump.
Anticipated protectionist measures and inflationary pressures are likely to boost U.S. yields, enhancing the dollar’s appeal. At the same time, a hawkish stance from the Fed further strengthens the greenback.
On a geopolitical level, investors remain vigilant. A further escalation of conflicts in Ukraine and the Middle East would increase volatility in the market, favouring safe-haven assets like the dollar. Looking forward, investors’ attention is now on the various speeches by Fed officials and the Michigan Consumer Sentiment data. Strong data could reinforce expectations of further monetary tightening, extending the dollar’s upward trajectory and exacerbating the peso’s challenges.
