Colombia Gross Domestic Product (YoY) came in at 2.3%, below expectations (3.1%) in 4Q

💡 DMK Insight

Colombia’s GDP growth of 2.3% in 4Q is a red flag for traders: it missed expectations by a significant margin. This shortfall could signal underlying economic weakness, potentially impacting the Colombian peso and local equities. Traders should keep an eye on how this affects the central bank’s monetary policy, especially if inflation remains a concern. A weaker GDP might prompt the Banco de la República to reconsider interest rate hikes, which could lead to increased volatility in forex pairs involving the peso. Look for key support levels in USD/COP around recent highs, as a bearish sentiment could push the pair higher if economic data continues to disappoint. Additionally, monitor related assets like Colombian bonds, which may react negatively to this news. On the flip side, if the market overreacts, there could be a buying opportunity for those looking at undervalued Colombian assets. Watch for any statements from the central bank in the coming weeks that could clarify their stance on future rate adjustments.