Several Brazil-based hedge funds are ramping up their bets against the Columbian peso in anticipation of tough times ahead for their Andean neighbour, according to a report by BNN Bloomberg.
Several Brazil-based hedge funds are ramping up their bets against the Columbian peso in anticipation of tough times ahead for their Andean neighbour, according to a report by BNN Bloomberg.
Not only will the short wagers pay off if the the currency weaken, but they are also exerting down pressure on the peso at a time when Columbia’s fiscal and current account deficits are leaving it especially vulnerable to the global economic slowdown.
The Colombian currency has seen a 10 per cent fall in the last month alone making it the worst performer amongst the world’s major currencies, prompting the likes of XP Asset Management, which went short the peso against the dollar about two months ago, and Kapitalo Investimentos Ltd, to boost their peso short positions.
The peso has dropped 10% in just the past month, the worst performance among major currencies, and Lemos has added to his bets on a decline. He’s keyed in on recent “dovish signs” from central bank policymakers even as inflation surprises to the upside.
The peso has been under pressure since the election of leftist president Gustavo Petro in June, weakening by 21 per cent sincere cam e to power on teh back of pledges to end new oil exploration and issue debt to buy land for the poor.
