Colombia's peso rose to a two-month high as stronger than forecast Chinese growth led to renewed appetite for higher yielding, emerging market assets.
The peso advanced 0.3 percent to 1,757.80 per dollar at 2:10 p.m. New York time, from 1,764 yesterday.
Earlier it touched 1,754.86, the strongest level since May 4.
The peso has risen 3.5 percent in the past three months, the best performance among 25 emerging market currencies.
"The external environment is helping gains in Latin American currencies today," said David Aldana, an analyst at brokerage Ultrabursatiles SA in Bogota.
"The strengthening trend in the peso should continue this third quarter, given the strong flows coming from both foreign direct investment and portfolio investment."
China's economy grew 9.5 percent in the second quarter from a year earlier, the statistics bureau in Beijing said, after a 9.7 percent gain in the first quarter.
That beat the median 9.3 percent estimate among 18 economists.
Foreign direct investment jumped to $5.75 billion in the first five months of 2011 from a year earlier, with 86 percent going into oil and mining, according to trade balance figures from the central bank.
That compares with $3.68 billion in the first five months of 2010. Foreign investment into stocks and bonds jumped eight-fold to $841 million in the same period this year.
'Worrying Levels'
Colombia's central bank may take further measures to contain gains in the peso at the July 29 monetary policy meeting, according to Aldana.
"The peso is reaching worrying levels," said Aldana.
In a bid to ease the peso's rally, Finance Minister Juan Carlos Echeverry said in april that the government would create an overseas fund with as much as $1.2 billion from dollars bought in the local market through the end of 2011, and forgo repatriating funds from abroad for the rest of the year.
Since Sept. 15, the central bank has bought a minimum of $20 million daily in the currency market, and plans to keep up the purchases until at least Sept. 30.
Banco de la Republica may seek to impose limits on foreign borrowing, Aldana predicts.
It may also increase the amount of dollars it buys daily in the spot market to at least $30 million, he said.
The yield on Colombia's 10 percent bonds due July 2024 fell 2 basis points, or 0.02 percentage point, to 7.78 percent, according to the stock exchange.
The bond's price rose 0.179 centavo to 117.773 centavos per peso.
Colombia's borrowing costs fell today at an auction of fixed-rate peso bonds, known as TES.
Peso bonds due July 2024 were sold to yield 7.747 percent, lower than the 7.808 percent at the last auction on June 22, the Finance Ministry said in a statement.
Colombia also auctioned bonds due October 2018 to yield 7.26 percent, and October securities to yield 6.63 percent.
The peso advanced 0.3 percent to 1,757.80 per dollar at 2:10 p.m. New York time, from 1,764 yesterday.
Earlier it touched 1,754.86, the strongest level since May 4.
The peso has risen 3.5 percent in the past three months, the best performance among 25 emerging market currencies.
"The external environment is helping gains in Latin American currencies today," said David Aldana, an analyst at brokerage Ultrabursatiles SA in Bogota.
"The strengthening trend in the peso should continue this third quarter, given the strong flows coming from both foreign direct investment and portfolio investment."
China's economy grew 9.5 percent in the second quarter from a year earlier, the statistics bureau in Beijing said, after a 9.7 percent gain in the first quarter.
That beat the median 9.3 percent estimate among 18 economists.
Foreign direct investment jumped to $5.75 billion in the first five months of 2011 from a year earlier, with 86 percent going into oil and mining, according to trade balance figures from the central bank.
That compares with $3.68 billion in the first five months of 2010. Foreign investment into stocks and bonds jumped eight-fold to $841 million in the same period this year.
'Worrying Levels'
Colombia's central bank may take further measures to contain gains in the peso at the July 29 monetary policy meeting, according to Aldana.
"The peso is reaching worrying levels," said Aldana.
In a bid to ease the peso's rally, Finance Minister Juan Carlos Echeverry said in april that the government would create an overseas fund with as much as $1.2 billion from dollars bought in the local market through the end of 2011, and forgo repatriating funds from abroad for the rest of the year.
Since Sept. 15, the central bank has bought a minimum of $20 million daily in the currency market, and plans to keep up the purchases until at least Sept. 30.
Banco de la Republica may seek to impose limits on foreign borrowing, Aldana predicts.
It may also increase the amount of dollars it buys daily in the spot market to at least $30 million, he said.
The yield on Colombia's 10 percent bonds due July 2024 fell 2 basis points, or 0.02 percentage point, to 7.78 percent, according to the stock exchange.
The bond's price rose 0.179 centavo to 117.773 centavos per peso.
Colombia's borrowing costs fell today at an auction of fixed-rate peso bonds, known as TES.
Peso bonds due July 2024 were sold to yield 7.747 percent, lower than the 7.808 percent at the last auction on June 22, the Finance Ministry said in a statement.
Colombia also auctioned bonds due October 2018 to yield 7.26 percent, and October securities to yield 6.63 percent.
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