(MENAFN- The Rio Times) The Colombian peso starts Wednesday trading around 3,720–3,740 per dollar, with the official representative market rate (TRM) for the day set at roughly 3,738 pesos.

That is about 0.9% stronger than Tuesday's close near 3,76 and leaves the dollar at its lowest levels against the peso in more than three years.

The move comes even as the dollar index stabilises around 99.5, with investors waiting for delayed US jobs data and Nvidia's earnings before taking big positions.

Local and global fundamentals are working in the peso's favour. Banco de la República kept its policy rate at 9.25% this month, leaving Colombia's real yield among the most attractive in emerging markets while inflation hovers near 5.5%.

In a weekly FX note, Accivalores writes that“the Colombian peso begins the week supported by government monetization, a weak global dollar, and a more restrictive BanRep policy that keeps the carry attractive.”

El Espectador cites Itaú Colombia's Carolina Monzón, who argues that the peso's strength reflects both the weaker global dollar and Finance Ministry dollar sales, which have reached roughly $4.1 billion this year, as well as expectations that local interest rates will stay high for longer.



On the technical side, the daily USD/COP chart shows a clear downtrend from above 4,000 in mid-year to around 3,700 now, with spot trading below the Ichimoku cloud and major moving averages.

MACD remains negative and RSI sits in the low-30s, signalling an extended but still intact peso appreciation trend. The 4-hour chart confirms short-term bearish momentum for the dollar, though RSI around the mid-40s and a flattening MACD histogram warn that the move may be losing steam.

Immediate support lies near 3,70; resistance is clustered around 3,75–3,80, where several moving averages and the lower edge of the former range converge.

Equities in Bogotá are echoing the currency story from the other direction. The MSCI COLCAP index closed Tuesday at 2,071.34 points, up 0.01% on the day and roughly 50% higher than a year ago, according to exchange data.

Turnover was just under 259 billion pesos, slightly below recent peaks but still healthy for the local market. Ecopetrol jumped more than 4%, helped by Brent crude holding in the mid-$60s, while Banco Davivienda preferred shares and Sura preferred rose around 3–4%.

On the downside, Canacol Energy fell more than 5%, Corficolombiana dropped about 4.5% and Mineros lost nearly 3%, illustrating how investors are rotating within the energy and financial complex rather than exiting Colombian risk altogether.



External vehicles confirm the constructive tone. The Global X MSCI Colombia ETF (COLO), which tracks the same market, is trading near $37.1, within sight of its 52-week high just above $38, and offers a dividend yield close to 5%.

Data from ETF databases show Latin America equity funds have attracted strong net inflows this year, with Colombia -focused products such as GXG receiving tens of millions of dollars in fresh money and broader regional funds far more, underscoring foreign appetite for the country's equity story.

Technically, Colombia's stock market remains in a powerful uptrend. On the daily COLCAP chart, prices ride well above rising short- and medium-term moving averages and remain comfortably inside an ascending channel.

MACD is positive but has started to roll over, while RSI around the mid-70s flags overbought conditions. The 4-hour chart shows the index stalling just below its recent high near 2,090, with momentum indicators turning down and the last few candles narrowing.

That combination suggests a period of sideways consolidation or a pullback toward initial support around 2,030–2,050 would be healthy rather than necessarily bearish, as long as the long-term trendline from the June lows (around 1,75–1,80 thousand points) holds.

For now, the picture is one of a strong currency and an exuberant equity market sustained by high local rates, steady oil prices and a still-soft global dollar.

The risks lie in the same places analysts have been flagging all year: Colombia's fragile fiscal arithmetic, upcoming minimum-wage negotiations and any surprise from the Federal Reserve that pushes the dollar index decisively higher.

If those factors stay contained, the peso's rally and Bogotá's remarkable equity run still have room to breathe, even if short-term technicals argue for a pause.

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