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COLOMBIA: COP Outperforms, Amid Uptick In Crude Prices

COLOMBIA
  • The Colombian peso has outperformed on Tuesday, aided by a pick-up in oil prices and continued pressure on the greenback amid renewed tariff concerns, as Trump said he would increase steel and aluminium tariffs on Canada to 50%. USDCOP has fallen by 1.1% to 4133, unwinding yesterday’s gains and keeping the pair around the middle of the recent ~4100-4180 range.
    • BBVA notes that COP has seen particularly tight price action and low volatility lately and has resisted the 4100 level abnormally well. Signs of risk appetite returning, however, could cause it to perform again, with carry remaining supportive.
    • To recap, last Friday’s stronger-than-expected CPI inflation data are likely to reinforce BanRep’s cautious stance. While a 25bp rate cut is still expected at the MPC meeting later this month, according to latest surveys, the Feb CPI data increase the chance that the pause in the easing cycle is extended for another month.
    • On the data front, focus turns to tomorrow’s Feb consumer confidence figures and retail sales and IP on Friday. While sales growth is expected to remain robust in January, IP growth is seen staying in negative territory.
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  • The Colombian peso has outperformed on Tuesday, aided by a pick-up in oil prices and continued pressure on the greenback amid renewed tariff concerns, as Trump said he would increase steel and aluminium tariffs on Canada to 50%. USDCOP has fallen by 1.1% to 4133, unwinding yesterday’s gains and keeping the pair around the middle of the recent ~4100-4180 range.
    • BBVA notes that COP has seen particularly tight price action and low volatility lately and has resisted the 4100 level abnormally well. Signs of risk appetite returning, however, could cause it to perform again, with carry remaining supportive.
    • To recap, last Friday’s stronger-than-expected CPI inflation data are likely to reinforce BanRep’s cautious stance. While a 25bp rate cut is still expected at the MPC meeting later this month, according to latest surveys, the Feb CPI data increase the chance that the pause in the easing cycle is extended for another month.
    • On the data front, focus turns to tomorrow’s Feb consumer confidence figures and retail sales and IP on Friday. While sales growth is expected to remain robust in January, IP growth is seen staying in negative territory.