If you trade the dollar against the Colombian peso (USD/COP) or follow the Chilean peso, you know these two currencies do not move on a whim: they respond to a handful of very specific variables — oil, copper, decisions by Colombia's central bank (Banco de la República, or BanRep) and the Central Bank of Chile (BCCh), country risk and foreign capital flows. Understanding those mechanics is what separates a trader who reacts late from one who anticipates the move.
This guide covers the structural drivers of both pairs, with USD/COP technical levels and practical examples for traders in Latin America and for anyone trading emerging-market currencies from the US, Canada or Europe.
Why the Colombian peso moves with oil
Colombia is a net crude exporter, so USD/COP has a historical inverse correlation with the oil price: when Brent rises, more dollars flow into the country from exports and the peso tends to strengthen (USD/COP falls); when crude drops, the opposite happens.
On September 24, Brent traded around $104.39 a barrel, with a bullish structure on the daily chart and a daily RSI of 58, still far from overbought territory. As long as crude holds above its 200-day moving average (about $85.80), the underlying support for the Colombian peso remains favorable, although that does not rule out short-term corrections in USD/COP driven by other factors.
The role of BanRep
Banco de la República sets its policy rate with the aim of anchoring inflation expectations. A more hawkish stance (rate hikes or tough talk on inflation) tends to attract carry-trade flows into the Colombian peso, while dovish signals — cuts or a long pause — tend to make it less attractive against the dollar. Traders follow BanRep's minutes and rate decisions closely: there are eight in 2026, almost always on the last business day of the month.
Update, October 1, 2026: on September 30, BanRep surprised with a hike from 12% to 12.25%, with inflation at 6.2%, and the dollar fell to 3,312.84 pesos in the next day's official rate (TRM). We analyze it in Colombia hikes rates to 12.25%.
Country risk and flows
The country-risk spread (usually measured through the EMBI or the spread on Colombian sovereign bonds) also matters: when the perception of fiscal or political risk rises, foreign investors cut positions in local debt (TES) and equities, which drains dollars and pushes USD/COP higher. Remittances and foreign direct investment have the opposite effect when they are strong.
What drives the Chilean peso: copper rules
USD/CLP follows similar logic but with a different commodity in the lead: copper. Chile is the world's largest producer of the metal, so strong copper usually means a stronger Chilean peso (USD/CLP lower), and vice versa. At the time of writing, USD/CLP traded near 965.31, although no intraday technical indicators were available for the pair, so it is worth following it in real time before drawing directional conclusions.
The Central Bank of Chile (BCCh)
Like BanRep, the BCCh sets its Monetary Policy Rate (TPM) with an inflation target. Its statements on the balance of risks between growth and inflation move rate expectations and, with them, the appeal of the Chilean peso against the dollar for carry-trade strategies.
Pension fund flows (AFPs)
A Chilean peculiarity: pension funds (AFPs) frequently rebalance between local and international assets. When the AFPs increase foreign exposure, they sell Chilean pesos and buy dollars, putting pressure on USD/CLP on specific dates of the month that local traders watch.
Current USD/COP technical levels
With data as of September 24, 2026 (Bogotá time), USD/COP traded at 3,354.24, with a bullish underlying trend on the intraday timeframes and high trend strength (ADX of 45.34 on H1).
| Indicator (H1) | Value |
|---|---|
| Price | 3,354.24 |
| RSI | 72.46 (overbought) |
| ADX | 45.34 (strong trend) |
| EMA 20 | 3,265.33 |
| EMA 50 | 3,208.18 |
| EMA 200 | 3,230.70 |
| Technical support (H4) | 3,335.67 |
| Technical resistance (H4) | 3,367.86 |
With the RSI overbought on both H1 (72.46) and H4 (76.10), the pair showed a very extended bullish impulse. A continuation scenario needed to hold above the 3,330–3,336 support zone; losing it would open a pullback toward the H1 20 EMA (3,265) or even the 50 EMA (3,208) without invalidating the underlying trend. To the upside, a confirmed break of 3,367–3,370 resistance would leave the path relatively clear, although it is always worth watching volume and country-risk news that can speed up or stall the move.
How traders use this information
- In Colombia, many traders follow USD/COP to hedge imports or simply to speculate through dollar-denominated trading accounts during New York hours. Bogotá does not use daylight saving time, so from March to November it is one hour behind New York, and the rest of the year it matches.
- In Chile, with a one- or two-hour difference from Bogotá depending on the season, many savers keep part of their money in dollar time deposits as a hedge against peso volatility.
- Elsewhere in Latin America, USD/MXN, USD/PEN and USD/ARS have their own dynamics, but traders compare USD/COP and USD/CLP as a regional gauge of risk appetite: if both currencies weaken at the same time, it usually signals broad dollar strength rather than a local problem.
- For traders in the US, Canada and Europe, the two pesos are a way to express views on oil and copper, and on the rate gap between Latin American central banks and the Fed. Keep in mind that spreads on these pairs are wider than on the majors.
Managing risk when trading Latin American currencies
USD/COP and USD/CLP can move sharply within minutes on data such as Colombian CPI, rate decisions by BanRep or the BCCh, or surprises in oil and copper prices. Some basic practices:
- Size your position according to your risk tolerance, not the potential profit.
- Use the ATR (Average True Range) to calibrate your stop loss: on H1, USD/COP had an ATR of 26.32 points, a useful reference to avoid stops that are too tight.
- Factor in your broker's spread and commissions, which can widen on volatile days or ahead of major macro releases.
- Do not trade based on an overbought indicator alone: the RSI can stay high during strong trends, as USD/COP's ADX showed on September 24.
Frequently asked questions
Why does the dollar rise against the Colombian peso?
Mainly when oil prices fall, when BanRep turns more dovish, when country risk rises or when foreign investment flows leave for dollar assets.
What is the link between copper and the Chilean peso?
Chile is the world's largest copper producer, so strong copper usually goes hand in hand with a stronger Chilean peso (lower USD/CLP), because it boosts the country's export revenue.
Which level does USD/COP need to break to confirm more upside?
With price at 3,354.24 on September 24, a sustained break above the 3,367–3,370 H4 resistance would favor continuation, while losing the 3,330–3,336 support would open room for a correction toward the H1 20 and 50 moving averages.
Is it a good idea to keep savings in dollars in Colombia or Chile?
It depends on each saver's profile; dollar deposits can hedge against a weaker local currency, but they also carry currency risk in the opposite direction. This is not investment advice, but a decision to weigh against personal goals and time horizon.
