Peso (COP) remains stable
Market Analysis by Quasar Elizundia, Expert Research Strategist at Pepperstone
– March 15, 2025 –
“The Colombian peso is trading relatively stable and is on track to close with gains for the second consecutive week (+0.6%), despite the significant deterioration in economic sentiment within the country. The recent plunge in the Consumer Confidence Index (CCI), which fell 10.9 points in February to reach -12%, reflects growing pessimism among Colombian households and a reduced willingness to spend, particularly on durable goods.
This cautious outlook is further emphasized by industrial production data, which declined 0.1% month-over-month in January and 1.7% year-over-year, highlighting notable declines in key sectors such as mining, quarrying, and water treatment. While the manufacturing sector achieved 1.9% growth, it has not been enough to offset losses in other production areas.
In contrast, retail sales showed strong performance in January, rising 10.2% monthly and 12.8% excluding fuel, far exceeding initial forecasts. However, the annualized reading was considerably more modest (3.2%), which limits optimistic outlooks on domestic consumption.
Externally, the Colombian currency faces mixed forces. On one hand, a slowdown in U.S. inflation and the normalization of the labor market have raised expectations of a more accommodative Federal Reserve, a factor that could boost demand for Colombian assets. On the other hand, a recent increase in trade tensions could trigger a decline in risk appetite, putting pressure on the Colombian peso.
Next week will be crucial for the Colombian market, with the release of key indicators such as the trade balance and the Economic Monitoring Index (ISE). Positive results in these areas could support the peso, while weak data would prolong uncertainty and add pressure on the currency.
In this context, the Colombian peso continues to show remarkable resilience, although its stability will largely depend on economic data trends and the global environment in the coming weeks.”
