COP: A Fundamental Boost

The Colombia peso has been one of the major regional outperformers over recent weeks, and we see little to threaten the currency's performance over the near term. The break through key resistance at COP1,875/US$ is as a particularly bullish technical signal, in our view, which should see the unit's recent rally against the US dollar continue for the time being. We see little technical resistance until the COP1,800/US$ level, at which point we would expect the rally to take a breather. Nevertheless, should the current spell of US dollar weakness continue, we would not be surprised to see this resistance broken, potentiallly presaging a move towards the COP1,700/US$ level.

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