Colombia’s peso, which hit its lowest level of the year one week ago, is rebounding significantly Wednesday as expectations of a plan to shore up European banks improves overall risk appetite for global investors.
The peso was recently at COP1,897 for a dollar, a two-week high, after falling to its weakest level of the year Oct. 4, at COP1,983.65. Colombia’s currency is 0.9% stronger from Tuesday’s close of COP1,915 for a dollar.
The improved risk sentiment is coming largely from expectations that European Commission President Jose Manuel Barroso will soon detail a plan to recapitalize European banks, which may help resolve the region’s debt problems.
This news has allowed U.S. stock markets and oil prices to gain in early trading, and the peso is following their trail, much as it has done for the past several weeks.
“All of today’s moves are in line with the other markets around the world, because there’s no news here locally,” said Juan Pablo Vieira, currency trader at Colombia’s biggest brokerage InterBolsa.