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COP Under Pressure As Oil Prices Slide

COLOMBIA
  • The slide in oil prices today and spike in the greenback following the stronger-than-expected US retail sales data is weighing on the Colombian peso, which is underperforming peers, currently 0.8% weaker against the dollar. WTI crude is down 1.2% to $80.9/bbl at the time of writing amidst concern about weaker demand in China.
  • USDCOP has risen to 3978, unwinding losses seen at the end of last week, but keeping the pair around 5.5% below mid-June highs. Analysts have noted that the cross is now back in the range from 1H24, prior to the volatility in June, although renewed COP weakness is a risk in H2 as central bank rate cuts continue and the US elections approach.
  • Today, focus turns to the government’s recently approved pension reform, which President Petro is expected to sign later. The reform would come into effect in July 2025.

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