Colombia’s peso on Tuesday rose, nearing a three-week high, on bets foreign direct investment into oil and mining will boost dollar inflows into the South American country.
Colombia’s peso strengthened 0.2 percent to 1,962 per U.S. dollar at 11:21 a.m. New York time, from 1,965.60 yesterday. The currency earlier reached 1,957.45. It climbed to 1,953.95 on June 3, its strongest level since May 14. Colombian markets were closed yesterday for a national holiday.
“Speculation of increasing company flows continues to be the biggest driver in the peso,” said David Aldana, head analyst at Bogota-based brokerage Ultrabursatiles SA. The peso jumped 6.7 percent in the last 12 months, the best performance among the six most-traded currencies in Latin America.
Colombia will attract about $10 billion in foreign direct investment this year, Trade Minister Luis Guillermo Plata has said. The nation received $7.2 billion of foreign direct investment in 2009 after a record $10.6 billion the previous year, according to the central bank.
The country’s peso bonds fell as concern the European sovereign-debt crisis will slow global growth hurt demand for higher-yielding, emerging-market assets, according to Aldana.
The yield on Colombia’s benchmark 11 percent bonds due July 2020 rose one basis point, or 0.01 percentage point, to 7.94 percent, according to Colombia’s stock exchange. The bond’s price fell 0.085 centavo to 120.752 centavos per peso.