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COP Outperforming Amidst Oil Recovery, Soft US Retail Sales

COLOMBIA
  • The Colombian peso is outperforming Tuesday following the soft US retail sales data and associated greenback weakness and aided by the further recovery in oil prices. The recent approval of pension reform by the lower house of congress may also be lending some support. USDCOP is currently 1% lower in the day, bringing the pair back below the 4100 level, having hit a 7-month high of 4211 last week.
  • BBVA note that COP suffered from the unwinding of carry trades in recent days, but is starting to see two-way flow again. They believe COP remains vulnerable to liquidity squeezes and still has some asymmetry for higher levels, noting USDCOP3965 as the resistance turned support and 4200-4250 as the first ceiling of the current correction.

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