(Bloomberg) Andean currencies were performing mixed and the Chilean peso added to the broad global perception of risk aversion as its growth data were disappointing, while the Colombian peso remained stable as oil prices remained higher on Thursday.
The Chilean currency weakened by 0.3% to 802.5 pesos to the dollar after data showed that the country's gross domestic product grew by 12% year-on-year in the fourth quarter, below the 13% expectation.
While the data is unlikely to change the opinion of operators that the central bank will continue to have a restrictive policy and raise rates to combat inflationary pressure, it adds to an already negative perception towards emerging market currencies seen on Friday.
The peso is trapped between its 100-day moving average close to 820 per dollar and the psychological level of 800 to the dollar. Global volatility is likely to have to be reduced for the peso to break through dollar support, as foreign capital inflows were the main driver of the currency's rally in the first two months of the year.
The Colombian peso remained stable at around 3,825 per dollar, while higher oil prices supported the currency.
The lack of clear progress in the Eastern European peace talks will likely continue to boost commodity prices due to supply shocks, giving Colombia an advantage over its Latin American peers.
Even so, the currency's advances are unlikely to last long, as the presidential elections in May keep investors on the sidelines, while awaiting clearer signals about the policies that the favorite candidate, Gustavo Petro, will follow.
Presidential candidates have until today to make known to the vice-presidents of their formula.
Colombia's January economic activity data are estimated at 10.4% compared to 11.8%.
The Peruvian sun falls 0.5% as operators expect central bank president Julio Velarde to report on the latest macroeconomic data.
The current trading range followed by traders is 3.67-3.80 soles per dollar. The upper limit coincides with the 50-day moving average, which strengthens it as a technical level.
(Some of the information comes from FX traders familiar with the transactions who asked not to be identified because they are not allowed to speak publicly.)
Original Note:
CLP Joins Losses in EMFX After GDP Misses Forecast: Inside Andes
Davison Santana is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended to be investment advice.
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