(Bloomberg) – Andean currencies follow other emerging market pairs lower on negative sentiment linked to rising U.S. Treasury yields amid stronger-than-expected nonfarm payroll data in the North American nation . The Colombian peso outperforms its peers as a rally in oil provides some support.
The Chilean peso weakens 1.1% and today ranks among the worst performing emerging market currencies. On Thursday, local markets closed at 11:30 am ET, missing the moment the Fed’s Powell failed to reassure markets about rising US yields.
The medium-term range between 693 and 747 pesos per dollar continues to be the most important reference for operators. The House curve today is rising 6-14 basis points, the biggest rise among Latin American swap curves, also due to yields in the US.
US Treasury yields rose further on Friday after nonfarm payrolls signaled that the world’s largest economy is heating up.
The Colombian peso, on the other hand, has weakened only 0.15%, a stronger performance compared to its peers, as the currency benefits from the extension of the oil rebound, which in the last three sessions in London increased 9.4%.
WTI crude rose to more than US $ 65 a barrel for the first time since January 2020 after the OPEC + alliance surprised traders with its decision to keep production unchanged.
The Colombian currency is testing the area near its 200-day moving average and the transfer of that level may pave the way for further depreciation towards 3,880 per dollar.
Colombia publishes its February CPI today after the local markets close. Inflation is expected to have accelerated to 0.51% month-on-month from the previous figure of 0.41%. However, the expected annual figure of 1.44% versus Banco de la República’s 3% target leaves officials with plenty of room to keep rates low to aid economic recovery.
(Some of the information comes from FX traders familiar with the transactions who requested not to be identified because they are not authorized to speak publicly.)
Nota Original:COP Outperforms on Oil While CLP Leads EMFX Losses: Inside Andes
NOTE: Davison Santana is a currency strategist writing for Bloomberg. The observations you make are your own and are not intended to be investment advice.
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