The Colombian peso fell in the American session on Monday to its lowest level in a week, weakened by the new postponement of Donald Trump on the tariffs. The moderation of Colombia inflation published last night supported the decline of the Colombian currency.
He USD/COP shot in the second half of Monday to 4,050.77, its highest level from Juli 1either. This Tuesday, the pair has stabilized near these maximums, moving in a narrow range between 4,031.80 and 4,045.12. At the time of writing, the par is quoted in the day over 4,034.00.
Colombian inflation is softened in June to its lowest level since 2021
- He Consumer Price Index (CPI) of Colombia was moderated in June to 4.82% year -on -year From 5.05% in May, below 5% for the first time since 2021. The figure improved market expectation, which expected 4.9%. At the monthly level, inflation rose 0.10% in May compared to 0.32% of the previous month, improving the 0.19% forecasts. The drop in prices weighed on the Colombian peso, since the Bank of the Republic of Colombia could decide to make an interest rate cut in its next meeting.
- The US executive announced in the American session on Monday that The application of the so -called reciprocal tariffs from July 9 to August 1 postponed. The news hit the markets, getting into the dollar against Colombian peso.
- On Thursday, Colombia will announce May unemployment figures, after April fell to 8.8% from 9.6% in March, reaching its lowest level in five months.
US Dollar – Frequently Questions
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values ​​that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
