Colombian peso extends gains
The Colombian peso rose by 1.96% against the US dollar on September 16, 2015, as retail sales and industrial production levels exceeded forecasts for July. The Colombian peso has been gaining against the dollar in the past few trading sessions after a dismal August when it was one of the worst performing currencies in the Latin American continent.
The Colombian peso was under a lot of pressure in the previous month as global prices of oil, Colombia’s major export, tumbled to further lows amid a slowdown in China. Even as economic growth has been slowing, the rise in inflation levels has been swift, reaching 4.74% in August in comparison to a year ago. This reflects market speculation that Colombia’s central bank might be looking to increase the benchmark interest rates, thus providing a boost to the domestic currency.
Industrial production, retail sales boost sentiment
Industrial production in July rose by 0.3% on an annual basis, in comparison to a forecast of a decline of 0.5%. Oil refining and chemical industries led the charge in recording these gains while the metallurgy and auto sectors offered a subdued performance.
On the other hand, retail sales in July boosted the sentiment by releasing at a year-over-year rate of 4.5%, compared with an anticipated increase of 3.1%.
Impact on the market
The American depository receipts (or ADRs) trading in Colombia were positive following the macroeconomic data releases. Petroleum multinational Ecopetrol (EC) went up by 4.67%, and BanColombia SA (CIB) ended higher at 3.49%. Grupo Aval (AVAL) ended on an upward note of 0.75%.