By Felipe Barragán, Expert Research Strategist at Pepperstone
September 10, 2025
“The Colombian peso came under pressure on Wednesday after data showed a sharp decline in consumer sentiment. August’s Consumer Confidence Index fell to -2.4%, down from 5.3% in July, driven by a 12.2 percentage point drop in perceptions of current economic conditions and a 4.7 percentage point fall in expectations for the coming months. This loss of confidence, particularly in durable goods purchasing, points to softer household demand, potentially endangering economic growth and weighing down on the peso.
Adding to the negative tone, Colombia’s external debt reached USD 207 billion in June, equivalent to 49% of GDP and well above pre-pandemic levels. Public debt accounted for 56% of the total, while private sector short-term obligations also remain high. With global interest rates still elevated, this leaves the Colombian economy exposed to external financing risks and currency volatility.
However, the rebound in oil prices could help limit the peso’s losses in the short term. Given Colombia’s reliance on crude exports, any declines could weigh on the currency. In the meantime, WTI crude extended gains for a third consecutive session, lifted by escalating tensions in the Middle East and a smaller-than-expected output hike from OPEC+ for October.
Looking ahead, all eyes are now on tomorrow’s US inflation data, which could shape global market sentiment. Softer readings may strengthen expectations for a 50 basis point rate cut at the Fed’s meeting later this month. Such a scenario could benefit the Colombian peso, given the interest rate differential.”