(MENAFN- The Rio Times) Key Points

• Peso trades around 3,76–3,80 per dollar as global dollar softness clashes with local fiscal worries.
  
• COLCAP sets another record near 2,116 points, extending a gain of more than 50 percent in a year.
  
• Markets reward high rates and strong earnings while quietly questioning President Petro's fiscal experiment.
  

Colombia's markets opened Friday with a familiar split: a hesitant currency and a roaring equity market.

The official TRM for the peso was set near 3,780.8 to the dollar, slightly stronger than earlier in the week, yet spot trading on Thursday still pushed USD/COP toward 3,804 before easing back in overnight flows.

The price action captures investors' unease: carry is attractive, but not enough to erase concerns about the country's policy direction.

Globally, the US dollar index briefly nudged above 99 on Thursday before slipping as traders priced in a Federal Reserve rate cut next week. Lower US yields would normally favour high-carry currencies such as the peso.



Instead, Colombia's wider current-account deficit and President Gustavo Petro's repeated warnings that blocking his tax package could drive the country toward default have kept a political risk premium embedded in the exchange rate.

It is a reminder that rhetoric can push money offshore even when macro fundamentals are improving. Equity investors are far more upbeat.

The MSCI COLCAP rose 0.49 percent on Thursday to 2,115.96 points, an all-time high and roughly 3.8 percent above a month ago, leaving the index more than 50 percent higher than a year earlier.

The rally is built on solid earnings and still-modest valuations after years in which politics depressed prices and foreign capital marked Colombia down as too noisy.

Local strategists say investors are again valuing banks, utilities and infrastructure groups as functioning businesses rather than as pawns in ideological battles.



Five clear winners from the latest session were the COLCAP itself; Bolsa de Valores de Colombia, up 1.3 percent; Ecopetrol, higher by 1.1 percent; fuel distributor Terpel, up 1.0 percent; and New York coffee futures, which added about 1.7 percent and support a flagship Colombian export.

Five notable losers were preferred shares in Grupo de Inversiones Suramericana, down 2.0 percent; grid operator ISA, off 1.7 percent; Bancolombia preferred, down 1.6 percent; cocoa futures, which edged lower; and the peso's one-day slip against the dollar, which briefly pushed USD/COP back above 3,80.

Technically, weekly USD/COP remains in a clear downtrend, but daily and four-hour charts show a short-term bounce stalling near resistance around 3,80–3,82.

COLCAP's daily and intraday indicators are overbought yet still edging higher, pointing to an eventual bout of profit-taking and consolidation rather than any fundamental vote of confidence in the government's more interventionist economic experiment.

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