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15 May 2015
USD/COP remains vigilant on oil – Rabobank
FXStreet (Edinburgh) - Strategist Christian Lawrence at Rabobank, remarks the key role of crude oil in the Colombian economy and the peso.
Key Quotes
“A chart of USD/COP looks distinctly like a mirrored version of WTI oil prices and our view on USD/COP direction for the rest of the year is very much dependent on oil prices”.
“We think that the top of the recent oil rebound is likely within touching distance and we see room for a move lower in the coming months, but we do expect oil to end the year above where we are now”.
“Outside of the oil picture, our expectation of the USD bid tone re-emerging should offer support for the pair”.
“In terms of monetary policy, we expect rates to stay at 4.50%, but we are somewhat sceptical about the central bank’s lack of concern over rising Fed rates as we still think that could trigger outflows particularly if accompanied by a dip in oil”.
Key Quotes
“A chart of USD/COP looks distinctly like a mirrored version of WTI oil prices and our view on USD/COP direction for the rest of the year is very much dependent on oil prices”.
“We think that the top of the recent oil rebound is likely within touching distance and we see room for a move lower in the coming months, but we do expect oil to end the year above where we are now”.
“Outside of the oil picture, our expectation of the USD bid tone re-emerging should offer support for the pair”.
“In terms of monetary policy, we expect rates to stay at 4.50%, but we are somewhat sceptical about the central bank’s lack of concern over rising Fed rates as we still think that could trigger outflows particularly if accompanied by a dip in oil”.