A warm welcome to our first, and belated, Rand Review for 2026...
...may it be a healthy and prosperous one!
Last week a relatively quiet week to cap off an extraordinary year...
...with thin holiday volumes doing little to dampen the Rand's momentum. The local unit drifted 15 cents stronger through New Year's, closing Friday at R16.49/$ – levels not seen since August 2022.
But the real story isn't the week...
...it's the year, with 2025 delivering the Rand's strongest performance in almost a decade – an 11.5% gain against the greenback, the best since 2016.
And then, just to start the year with a bang, as the noise of champagne corks popping had hardly subsided, Donald Trump decided to close out his first year in office by capturing Venezuela's Nicolás Maduro in a daring pre-dawn military raid.
Let's dig into how it all played out....
Key Moments (30 Dec 2025 - 3 Jan 2026)
These were some of the major headlines and events over the past five days:
🎯 2025: Best Year Since 2016: Rand strengthened 11.5% for the year – the best annual performance in almost a decade
📉 Volatility Hits 25-Year Lows: 1-month implied volatility fell to 7.9% – lowest since February 2000
💰 Record Foreign Bond Inflows: Q3 2025 saw R71.8bn in foreign purchases – the biggest quarterly inflow on record
🏭 US Manufacturing Still Contracting: ISM Manufacturing at 47.9 – 9th consecutive month below 50
🚨 Maduro Captured: US forces seize Venezuelan dictator on Saturday morning – now in Brooklyn detention awaiting arraignment
Monday: Holiday Wind-Down 📉
Monday opened at R16.64/$ with the holiday wind-down already in full swing...
...and volumes reflecting it. Most traders had mentally checked out for the year, leaving the pair to drift in a narrow 10-cent range between R16.63 and R16.73.
The Rand tested marginally weaker to R16.73 in early trade – the week's high – before settling back to close at R16.66/$...
...a modest 2-cent gain, but still holding onto those gains!
Tuesday: Still Gas Left in the Tank 📉
Tuesday opened at R16.66/$ and the Rand decided to end the year with a statement...
...pushing still stronger as thin liquidity amplified the move.
Early trade saw the pair test weaker to R16.71, but that was as far as the bears got.
By mid-morning, the local unit had found its feet and started pushing through R16.60. Whether it was year-end portfolio rebalancing or simply the lack of Rand- sellers, the result was the same.
By the close, we'd touched R16.55/$ – an 11-cent gain on the day and the biggest single-day move of the week..
Wednesday: An Impressive Yearend 🎉
Wednesday saw an early close ahead of New Year's Eve celebrations...
...with the Rand managing to hold out steady around R16.63/$ after testing 10c stronger earlier in the day. Trading was even thinner than Tuesday, with most desks either empty or running skeleton crews. No fireworks in the markets – those were reserved for midnight...
...but looking back at the year, there was certainly reason to celebrate what has been a remarkable twelve months for the local unit and other financial markets.
The year-end numbers tell the story:
- Rand +11.5% against the dollar, the best performance since 2016.
- JSE up 36% to all-time highs.
- Business confidence at 14-year highs.
- Bond yields at 5-year lows with record foreign inflows.
- Volatility at 25-year lows.
Not too shabby a performance, all things considered.
With the markets being closed for New Year's Day, Thursday was time to reflect on what has been a pretty watershed year, from many perspectives, with financial markets have some record runs, and traditional geopolitics being turned on the head...
...little did we guess more was coming shortly!
Friday: Back to Business 📊
Friday saw markets reopen with the Rand picking up where it left off...
...testing stronger through the R16.55 handle in early trade. US ISM Manufacturing data landed at 47.9 – the 9th consecutive month of contraction for America's factory sector. Not great for the world's largest economy, but markets had largely priced it in.
The weak print added modest pressure to the dollar, helping the Rand push through to test R16.38/$ mid-session – the week's best – before settling back to close at R16.49/$. A solid 15-cent gain for the week, capping off a stellar 2025.
And then Saturday morning happened.
And in other news...
Maduro's New Brooklyn Address 🚨
Saturday morning brought one of the most dramatic geopolitical events in decades...
...with US special forces capturing Venezuelan President Nicolás Maduro in a daring and surgically planned pre-dawn raid on Caracas.
"Operation Absolute Resolve" launched in the early hours, with 150 aircraft from 20 airbases coordinating the extraction. Maduro and his wife were seized from a fortified compound and flown to New York aboard an FBI aircraft. He's now sitting in Brooklyn's Metropolitan Detention Centre, following he and his wife's arraignment on Monday.
Trump called it "one of the most stunning displays of American military might in American history." The UN called it "a dangerous precedent."
And the reaction on the ground? It depends where you were standing.
Within hours of the news breaking, protests erupted across major US cities – complete with professionally printed banners and coordinated messaging...
...quite the logistical feat for a Saturday morning surprise!
Are these the same (paid?) "protesters" supporting a real dictator now - after having their "No Kings" parades just a few weeks ago?
Something doesn't add up, except if you know who is behind it all...
...follow the money, they say!
Meanwhile, across Venezuela and across the globe, the scenes from actual Venezuelans was very different...
...with crowds gathering in the streets to celebrate.
After years of economic collapse, hyperinflation, and an exodus of nearly eight million citizens...
...and elections that suspiciously managed to pull Maduro back from what was looking like a landslide loss...
...most Venezuelans view Maduro's removal as liberation rather than invasion.
And oil markets?
They barely blinked.
WTI crude rose about 1.5% to $58/barrel on Monday's open. Gold jumped 2.7%, silver 6.6% – the usual safe-haven flows. But the broader reaction has been remarkably muted. Venezuela may have the world's largest oil reserves, but it only produces about 800,000 barrels a day...
...thanks to years of underinvestment, mismanagement and corruption...sounds familiar!
But the real question isn't what happens this week – it's what a post-Maduro Venezuela looks like in five years.
The Year That Was 2025 📊
Before we close out, let's put 2025 in perspective...
...because it really was extraordinary.
The Rand's 11.5% gain was the best since 2016 (see below), putting it at #2 among the top three performances in the past two decades. But it wasn't just the headline number – it was everything underneath:
Implied volatility fell to 25-year lows (7.9%, lowest since February 2000). SARB Governor Kganyago put it perfectly: "When people tell you the Rand is a weak and volatile currency, encourage them to think again."
Foreign investors poured R71.8 billion into SA bonds in Q3 alone – the biggest quarterly inflow on record. The 10-year yield dropped below 8.20% for the first time since January 2020.
The JSE hit all-time highs, up 36% for the year. Platinum surged 120-170% to record levels (music to SA miners' ears, given we produce 70%+ of global supply).
Business confidence touched 14-year highs.
And Eskom? 231 consecutive days without load shedding as of Friday.
Saffers haven't had a year like this in many moons!
Volatility & Risk Analysis
Here's how the (holiday-thin) volatility played out:
- Open to Close Move: The week opened at R16.64/$ Monday morning and closed Friday afternoon at R16.49/$ – a 15c (0.9%) strengthening.
- Average Daily Range: ~8c (0.5%)
Risk per $1 Million Exposure: R80,000 - Maximum Single-Day Move: ~11c (0.7%) on Tuesday
Risk per $1 Million Exposure: R110,000 - Weekly Range: 26c (R16.47 low to R16.73 high) – 1.6% swing
Risk per $1 Million Exposure: R260,000
For importers, these levels haven't been seen since mid-2022 – if you've been waiting to cover, the wait has paid off.
For exporters, it has been a tough year, but one thing to remember, the Rand often changes trend around yearend.
The Week Ahead (6-10 January 2026)
The first proper trading week of 2026. US data comes back into focus with ISM Services and employment numbers.
But the wildcard is Venezuela – how markets digest the Maduro capture over the coming days will set the tone for EM risk appetite.
Enjoy - and please let me know what you think!
Until next week, stay sharp out there!
To your success~
James Paynter
P.S. If you find value from The Market Demystifyer, we're running a founders special for this for a limited time, which you can grab at $19/mth, $52/qtr or $190/year for a limited time.
P.P.S. Managing year-end forex exposure? Give me a shout on 087 551 2848 or on Whatsapp – with Rand volatility picking up, proper positioning matters more than ever.
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Flying Blind Is Costly
This week proved once again that markets move in cycles, not linear economist logic.
While mainstream analysts were celebrating Tuesday's Dow record, our forecast system was already signaling the Rand would push through R17 before reversing...
...and it delivered, hitting R16.95 - dead centre of our predicted 17.08-16.89 range...
...before losing 25 cents in a classic reversal.
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To your success~
James Paynter
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