The Colombian dollar closed higher on Tuesday, reaching $3,659.85, driven by expectations of two Federal Reserve rate cuts in 2026. Meanwhile, Brent and WTI oil prices fell slightly amid tensions in the Strait of Hormuz. Traders are assessing economic data that could influence U.S. monetary policy.
Financial markets displayed calm on Tuesday following recent volatility, with the dollar closing at $3,659.85, up $7.95 from the Representative Market Rate of $3,651.90. The currency fluctuated between a low of $3,641 and a high of $3,679, involving 1,573 transactions totaling US$1.010 million.
Investors anticipate two rate cuts by the Federal Reserve in 2026, the first potentially under Kevin Warsh, who would succeed Jerome Powell after his resignation in May. Analysts note that this week's economic data will be crucial to determine if the economic recovery shifts from a K-shape to a V-shape. "What is at stake with this week's U.S. data is whether we can move from a K-shaped rebound to a V-shaped one," said Kevin Thozet, a member of Carmignac's investment committee.
Trevor Greetham, head of multi-asset investing at Royal London Asset Management, indicated that stocks are more driven by interest rate expectations than corporate earnings. "This can be seen in the performance of the technology sector and the movement in U.S. Treasury bond yields," he added.
In the oil market, Brent declined 0.35% to US$68.80 per barrel, while West Texas Intermediate dropped 0.47% to US$64.06. The dip stems from assessments of potential supply disruptions due to U.S.-Iran tensions in the Strait of Hormuz, through which nearly one-fifth of global oil passes. "The market remains focused on tensions between Iran and the United States, but unless there are concrete signs of supply disruptions, prices are likely to start falling," stated Tamas Varga, an analyst at PVM.
The U.S. Maritime Administration advised commercial vessels to avoid Iranian waters, heightening geopolitical concerns. Additionally, the European Union proposes extending sanctions to ports in Georgia and Indonesia handling Russian oil, and India's Indian Oil Corp purchased six million barrels of crude from West Africa and the Middle East.
