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World's Leading Currency Rally: The Pound to Colombian Peso

In recent years, the U.S. dollar has held its reign as the world's dominant currency—a safe haven in turbulent times, further solidified by post-pandemic inflation and geopolitical conflicts.

Yet, 2023 has seen an unlikely challenger rise to the top: the Colombian Peso.

Columbian Flag

While the dollar remained robust against a backdrop of global uncertainties, the Peso has quietly ascended the ladder, usurping the King Dollar to become this year's top-performing currency.

In this article, we delve into the factors that have led to this surprising turn of events and the ironies that characterise the Peso’s meteoric rise.

  • The Colombian Peso's rise to the top, and a brief history of its performance.

  • The key factors supporting its current rally.

  • The paradox of President Gustavo Petro's waning influence alongside a strong currency.

Current Colombian Peso Spot: 3,986.04 COP, +1.26%

Colombian peso has outshined all other global currencies this year, Bar chart showing forex and commodities prices, green/red candles depict daily trading trends. Includes moving average, Bollinger bands, and RSI.
Colombian Peso has outshined all other global currencies this year,

A Brief History of the Colombian Peso

Before delving into the present, it's crucial to appreciate the historical context of the Colombian Peso (COP). Born from the dissolution of the Spanish colonial real, the Peso has witnessed numerous economic highs and lows since Colombia's independence.

In recent years, it has faced pressure from internal and external factors such as political instability, commodity price fluctuations, and shifts in global markets. Nonetheless, it has shown remarkable resilience, a quality that shines brightly this year.


This year, the Colombian peso has emerged as a shining star among currencies. Its status as the world’s top-performing currency in 2023 has been fuelled by two major factors: the steady climb of crude oil prices and a remarkably high interest rate. This surge occurs in the interesting backdrop of President Gustavo Petro’s faltering political influence.

Month on Monthly Chart showing the rise of the Peso vs GBP
Monthly Chart showing the rise of the Peso vs GBP

The Petro Paradox

Gustavo Petro, Colombia's first leftist President, initially rattled markets with promises of comprehensive reforms in tax, health care, labour, and pensions. "Don’t lose your money by betting against the Peso," he warned Colombians via Twitter. However, as Petro's star has dimmed, failing to push through key reforms, the Colombian Peso and government bonds have paradoxically gained strength.

High Stakes and High Interest Rates

Colombia's high benchmark interest rate, standing at a whopping 13.25%—the highest in Latin America—has been a key pillar supporting the Peso's strength. According to Claire Dissaux, a sovereign EM credit analyst at AXA Investment Managers, this offers a layer of “protection” for investors who had initially overestimated the negative impact of Petro's policies.

Crude Realities

Rising crude oil prices have further buoyed the Peso. Ironically, President Petro aims to phase out oil exports, yet it’s these very exports contributing significantly to Colombia's fiscal well-being.

Trade the COP/USD Pair

For those looking to capitalise on the Colombian Peso's strengths, you can trade the COP/USD currency pair on most trading platforms.

We recommend checking out our partners, Vantage and Oanda, for competitive rates and reliable service. Or consider the weakening the pound to Colombian peso as the price of crude oil may head to $100 a barrel.

What's Next?

The currency remains susceptible to sudden changes, especially if Petro gains some legislative momentum. As Felipe Pianetti of Lazard Asset Management points out, low expectations of Petro's political agenda have been "priced into the Peso."

Pound to Colombian Peso, what's your thinking?

The situation of the Colombian Peso is a captivating case study in the financial markets. Its strength, contrary to the President’s weakening influence, makes it a subject of keen interest for traders and political observers alike.

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Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organisation, employer, or company.

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