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Investing.com - The Colombian peso is expected to fall to 4,600 against the U.S. dollar by the end of 2026, making it Latin America’s worst-performing major currency, according to a new report from Capital Economics released Friday.
The peso, which currently trades at 4,039 to the dollar, has strengthened by approximately 9% against the US currency this year, positioning it among the best-performing major Latin American currencies despite recent pressure.
Capital Economics attributes the projected decline to Colombia’s "fragile fiscal position," which analysts believe could deteriorate further ahead of elections scheduled for next year.
The research firm also cited an expected worsening of Colombia’s current account deficit as a key factor that will drive the currency lower "by more than most currently anticipate."
The peso’s strong performance so far this year has occurred despite significant negative developments, particularly fiscal challenges and Colombia’s deteriorating relationship with the United States, making its current strength "perhaps surprising," according to the report.
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