Market Analysis by Quasar Elizundia, Expert Research Strategist at Pepperstone
– April 21, 2025 –
“The Colombian peso capitalised on renewed dollar weakness to post gains against the US currency, supported by signs of domestic growth resilience. The dollar index fell to its lowest level in multiple years, after remarks from President Trump raised concerns over the Federal Reserve’s independence. Markets were rattled by reports that Trump is exploring the removal of Fed Chair Jerome Powell, undermining confidence in US monetary policy and driving investors away from the greenback.
Locally, Colombia’s latest growth figures delivered a mixed message. The ISE rose 1.77% year-on-year in February, slowing from 2.65% in January. Although the monthly gain was mildly positive, the deceleration may fuel investor caution. Moreover, growth was concentrated in services, while industry and agriculture contracted, highlighting the economy’s structural imbalances. This weak supply-side performance may limit the peso’s upside, especially in a context of external fragility.
Adding to the external pressures, Brent crude prices are likely to remain under pressure amid easing US-Iran tensions and expectations of increased OPEC+ supply. As a key oil exporter, Colombia faces renewed risks to its fiscal outlook, though the peso has temporarily benefited from the dollar’s decline.
Looking ahead, markets will monitor Colombia’s trade balance and import data due on Wednesday. In the US, commentary from Fed officials may shape global risk sentiment and influence the peso’s near-term trajectory.”
