By Felipe Barragán, Expert Research Strategist at Pepperstone

 September 17, 2025 

“The Colombian peso extended gains on Tuesday, reaching multi-month highs against the US dollar, supported by strong domestic indicators, a rise in oil prices, and broad dollar weakness. Retail sales surged 17.9% year-on-year in July, far surpassing expectations of 11.6%, while industrial production expanded by 2.9%. All 19 categories of retail goods posted growth.

In industry, manufacturing output led the gains with a 5.8% increase, offsetting a sharp 8.0% contraction in mining and quarrying. The labour market also showed resilience, with retail employment rising 0.9% amid a shift toward more permanent hiring. These improvements provide a robust backdrop for domestic demand and offer support for the currency.

Externally, WTI crude prices rose following further attacks on Russian oil infrastructure and tightening supply conditions. With Colombia being a net oil exporter, the upswing in energy prices bolstered the peso’s appeal.

Meanwhile, the US dollar remained under pressure despite stronger-than-expected US retail and industrial data, as markets anticipate a 25-basis-point Fed rate cut this week. The shift toward looser monetary policy continues to erode dollar support, creating tailwinds for the peso.

Looking ahead, investors will closely monitor this week’s ISE economic activity data. A reading above 2.94% could reinforce bullish sentiment and extend the peso’s current rally..”