June 8 (Bloomberg) -- Colombia’s peso rose, approaching a three-week high, on speculation foreign direct investment into oil and mining will boost dollar inflows into the South American country.

Colombia’s peso strengthened 0.3 percent to 1,960.62 per U.S. dollar at 4:40 p.m. New York time, from 1,965.60 yesterday. The currency climbed to 1,958.93 on June 3, its strongest level on a closing basis since May 13. Colombian markets were closed yesterday for a national holiday.

“Speculation of increasing company flows continues to be the biggest driver in the peso,” said David Aldana, head analyst at Bogota-based brokerage Ultrabursatiles SA. The peso jumped 6.7 percent in the last 12 months, the best performance among the six most-traded currencies in Latin America.

Colombia will attract about $10 billion in foreign direct investment this year, Trade Minister Luis Guillermo Plata has said. The nation received $7.2 billion of foreign direct investment in 2009 after a record $10.6 billion the previous year, according to the central bank.

The country’s peso bonds fell as concern the European sovereign-debt crisis will slow global growth hurt demand for higher-yielding, emerging-market assets, according to Aldana.

The yield on Colombia’s benchmark 11 percent bonds due July 2020 rose 11 basis points, or 0.11 percentage point, to 8.03 percent, according to Colombia’s stock exchange. The bond’s price fell 0.818 centavo to 120.019 centavos per peso.