12 Aug 2015
COP revised to neutral from bearish – BAML
FXStreet (Edinburgh) - The outlook on the Colombian peso has been upgraded to neutral from bearish, according to analysts at BAML.
Key Quotes
“In foreign exchange markets we moved the Colombian peso to bearish from neutral”.
“We like buying MXN/COP forwards. We forecast COP to end this year at 2925, above currency forwards”.
“The main drivers for our bearish call are our out-of-consensus forecasts for low growth and interest rate cuts, still large currency overvaluation based on economic fundamentals, and our commodity strategists’ forecast for lower oil prices in coming months”.
“We expect further declines in economic growth will prompt the central bank to cut interest rates in 2H15, putting pressure on COP. Also, the sale of the government’s stake in Isagen has been postponed until a court ruling in August”.
Key Quotes
“In foreign exchange markets we moved the Colombian peso to bearish from neutral”.
“We like buying MXN/COP forwards. We forecast COP to end this year at 2925, above currency forwards”.
“The main drivers for our bearish call are our out-of-consensus forecasts for low growth and interest rate cuts, still large currency overvaluation based on economic fundamentals, and our commodity strategists’ forecast for lower oil prices in coming months”.
“We expect further declines in economic growth will prompt the central bank to cut interest rates in 2H15, putting pressure on COP. Also, the sale of the government’s stake in Isagen has been postponed until a court ruling in August”.