The Colombian peso strengthened on Thursday for the first day in six following other currencies such as the Brazilian real, which appreciated as the bullish growth data in the U.S. boosted risk appetite.
The peso strengthened to 1,975.05 pesos to the dollar from COP2,021.9 on Wednesday. The currency had depreciated 6.3% between Oct. 21 and Wednesday.
Earlier Thursday, the U.S. reported preliminary data on third-quarter gross domestic product, showing a robust 3.5% annualized growth rate. The figure beat analyst expectations, which had focused on 3.2%. The GDP data seemed to signal an end to the long U.S. recession, raising hopes for sustainable growth in the world economy in 2010.
“The peso followed other world currencies as there is more confidence after the U.S. data,” Jaime Rodriguez, a market analyst with local brokerage Asesores en Valores, said. “But on top of that, in Colombia, investors are unsure the central bank’s measures will be effective to stem the peso appreciation in the longer term,” he added.
Since mid-October, the Colombian government and the central bank have taken steps intending the limit the peso from appreciating too much after the currency had gained about 20% since late 2008.
On the bond market the yield on the benchmark peso-denominated local government bond maturing in 2020 fell to 8.395% from 8.422% on Wednesday. The yield didn’t end below 8.40% since May 2006, Rodriguez said.
The benchmark IGBC stock index rose 0.9% to 10921.26 points.
Shares of cement maker Cementos Argos SA fell 4.7% to COP10,240 after its controlling shareholder Inversiones Argos SA (ARGOS.BO) said it is evaluating selling between 5% and 9.73% of Cementos Argos possibly on the local stock market.
Shares of Grupo de Inversiones Suramericana SA rose 2.8% to COP23,440. (Dow Jones)