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Colombia's Peso And Stocks Shudder After Fitch Downgrade As Oil Bounces
(MENAFN- The Rio Times) Key Points
USDCOP traded near 3,853.7 in early morning pricing, while Colombia's official TRM for the day is 3,866.77. Wednesday's onshore session closed around 3,867 after a wide 3,840–3,888 range, and roughly $1.53 billion traded on Set-FX.
The size and spread of the move signaled a classic“event day,” not a routine December drift. The trigger was Fitch 's downgrade of Colombia's sovereign rating to BB from BB+, pointing to persistent fiscal deficits and a debt load expected to rise.
Markets treated it as a direct increase in Colombia's risk premium: government bond yields moved higher across the curve, and traders repriced the fiscal path more aggressively.
The downgrade also landed as investors digested execution optics-high overall budget execution through November but a notably weaker pace of committed investment.
Outside Colombia, the global tape offered little comfort. U.S. equities fell sharply, led by expensive tech, as investors questioned the durability of parts of the AI trade.
Europe looked more resilient after softer-than-expected U.K. inflation, while China's main large-cap index rose. The dollar index stayed firm enough to keep emerging-market FX on a short leash.
Oil was the one clean offset for Colombia. Brent rebounded above $60 after President Donald Trump ordered a blockade on sanctioned tankers tied to Venezuela, adding a geopolitical premium.
Even so, strategists continue to flag a medium-term supply headwind into 2026, with non-OPEC growth led by Brazil, Guyana, and Argentina. Colombian equities tracked the currency stress. The MSCI COLCAP fell 0.91% to 2,053.3 as financials lagged.
Davivienda's announcement of a COP 1,048-per-share dividend-paid in two installments on January 15 and April 15, 2026-offered a pocket of support, while Grupo Argos' planned leadership transition for April 2026 added corporate texture without changing the day's macro-driven tone.
Top winners: Terpel (+2.53%), Grupo Bolívar (+1.71%), Ecopetrol (+0.83%), CSI 300 (+1.83%), FTSE 100 (+0.92%).
Top losers: PF Grupo Sura (-3.38%), Corficolombiana (-2.30%), PF Davivienda (-2.00%), Nasdaq (-1.81%), S&P 500 (-1.16%).
Technically, the peso's 4-hour chart shows improving momentum, but the daily picture still looks like consolidation. A sustained break above roughly 3,880–3,890 would make“trend change” a live call; without it, the move reads as repricing and digestion after a credibility shock.
Fitch's cut to BB triggered a fast repricing in COP, local rates, and equities, with heavy FX turnover.
Global risk tone stayed fragile as U.S. tech-led selling met a firmer dollar backdrop, limiting any EM relief.
The COLCAP slipped back toward early-month levels, with financials hit hardest and energy names steadier.
USDCOP traded near 3,853.7 in early morning pricing, while Colombia's official TRM for the day is 3,866.77. Wednesday's onshore session closed around 3,867 after a wide 3,840–3,888 range, and roughly $1.53 billion traded on Set-FX.
The size and spread of the move signaled a classic“event day,” not a routine December drift. The trigger was Fitch 's downgrade of Colombia's sovereign rating to BB from BB+, pointing to persistent fiscal deficits and a debt load expected to rise.
Markets treated it as a direct increase in Colombia's risk premium: government bond yields moved higher across the curve, and traders repriced the fiscal path more aggressively.
The downgrade also landed as investors digested execution optics-high overall budget execution through November but a notably weaker pace of committed investment.
Outside Colombia, the global tape offered little comfort. U.S. equities fell sharply, led by expensive tech, as investors questioned the durability of parts of the AI trade.
Europe looked more resilient after softer-than-expected U.K. inflation, while China's main large-cap index rose. The dollar index stayed firm enough to keep emerging-market FX on a short leash.
Oil was the one clean offset for Colombia. Brent rebounded above $60 after President Donald Trump ordered a blockade on sanctioned tankers tied to Venezuela, adding a geopolitical premium.
Even so, strategists continue to flag a medium-term supply headwind into 2026, with non-OPEC growth led by Brazil, Guyana, and Argentina. Colombian equities tracked the currency stress. The MSCI COLCAP fell 0.91% to 2,053.3 as financials lagged.
Davivienda's announcement of a COP 1,048-per-share dividend-paid in two installments on January 15 and April 15, 2026-offered a pocket of support, while Grupo Argos' planned leadership transition for April 2026 added corporate texture without changing the day's macro-driven tone.
Top winners: Terpel (+2.53%), Grupo Bolívar (+1.71%), Ecopetrol (+0.83%), CSI 300 (+1.83%), FTSE 100 (+0.92%).
Top losers: PF Grupo Sura (-3.38%), Corficolombiana (-2.30%), PF Davivienda (-2.00%), Nasdaq (-1.81%), S&P 500 (-1.16%).
Technically, the peso's 4-hour chart shows improving momentum, but the daily picture still looks like consolidation. A sustained break above roughly 3,880–3,890 would make“trend change” a live call; without it, the move reads as repricing and digestion after a credibility shock.
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