Bloomberg News

Colombian Peso Jumps to One-Month High on European Debt Deal

October 27, 2011

Oct. 27 (Bloomberg) -- Colombia’s peso jumped to a one- month high as European leaders agreed to expand a bailout fund aimed at resolving the region’s debt crisis and after a report showed U.S. growth accelerated in the third quarter.

The peso climbed 0.9 percent to 1,861.50 per U.S. dollar, from 1,879.10 yesterday. Earlier it touched 1,859.13, its strongest level since Sept. 28. Today’s gain pares the peso’s decline in the last three months to 5.1 percent.

“Markets are reacting to all the good news abroad,” said Guillermo Puentes, head trader at Banco de Comercio Exterior de Colombia SA, known as Bancoldex.

Global stocks rallied and emerging market currencies gained as European leaders persuaded bondholders to accept 50 percent writedowns on Greek debt and boosted their rescue fund’s capacity to 1 trillion euros ($1.6 trillion) in a crisis- fighting package intended to shield the euro area. Measures include recapitalization of European banks, a potentially bigger role for the International Monetary Fund, a commitment from Italy to do more to reduce its debt and a signal from leaders that the European Central Bank will maintain bond purchases in the secondary market.

The U.S. Commerce Department said today that the world’s biggest economy grew 2.5 percent in the third quarter, its fastest pace in a year, as gains in consumer spending and business investment helped support a recovery on the brink of faltering.

The yield on Colombia’s benchmark 10 percent bonds due in July 2024 fell one basis point, or 0.01 percentage point, to 7.46 percent. The bond’s price rose 0.044 centavo to 120.410 centavos per peso.

--Editors: Marie-France Han, Glenn J. Kalinoski

To contact the reporter on this story: Andrea Jaramillo in Bogota at ajaramillo1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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