It was a week of milestones and whipsaws...
...with the Rand pushing through R16.70/$ for the first time in over three years, while markets digested a double dose of delayed US data.
The NFP report finally landed on Monday — the first official jobs numbers since September, thanks to the 43-day government shutdown. Then Thursday brought a CPI print that caught everyone off guard (more on that shortly).
Both releases reinforced what markets have been betting on: the Fed's cutting cycle isn't done yet.
Back home, SA inflation came in cooler than expected, strengthening the case for another SARB cut in January. And here's the thing about sentiment — just when everyone was writing the Rand off earlier this year (remember those R19+ levels?), that was precisely when the tide began to turn.
The result? A second consecutive week of Rand strength, with the local unit finishing at R16.74/$ — a 12 cent gain (0.70%), and the week's low touching R16.69, the strongest level since August 2022.
Let's dig into how it all played out...
Key Moments (15-19 December 2025)
These were some of the major headlines and events over the past five days:
- 📊 SA CPI Beats Expectations: November inflation at 3.5% YoY (down from 3.6%, below 3.6% est.) — strengthens case for Jan rate cut
- 👷 US NFP Finally Lands: +64,000 jobs in November (beat +50K est.), but unemployment jumps to 4.6% — 4-year high
- 📉 October Payrolls Revised to -105K: Federal buyouts and shutdown distortions revealed — labour market weaker than thought
- ✂️ US CPI Surprises Lower: November inflation at 2.7% YoY (vs 3.1% est.) — lowest since July, markets rally
- 🥈 Silver Smashes All-Time High: White metal touches $66.87/oz — up 128% YTD, best year since 1979
- 🇺🇸 US-SA Tensions Escalate: SA deports 7 Kenyans processing Afrikaner refugees; Rubio accuses SA of "harassment" — Rand shrugs
- 💪 Rand Hits 3-Year Best: Local unit touches R16.69/$ Thursday — strongest since August 2022, up 10%+ YTD
Monday: NFP Day Delivers Mixed Signals
Monday opened at R16.86/$ and immediately tested weaker, pushing up to R16.89 in early trade...
...but the real action was waiting for the US session.
At 15:30 SA time, the long-awaited Non-Farm Payrolls report finally landed — the first official jobs data since September, after the 43-day government shutdown had frozen BLS releases. The headline: +64,000 jobs in November, beating the +50,000 consensus.
But what is the reality?
Dig deeper and the picture wasn't so rosy. October's payrolls were revised to show a loss of 105,000 jobs (federal buyouts taking their toll), and unemployment jumped to 4.6% — a 4-year high. Average hourly earnings growth slowed to 3.5% YoY, the weakest pace in years. Pretty revealing, isn't it?!
The Rand's reaction? Cautious strength. We pushed back through R16.80/$ by late afternoon, testing R16.78 before settling at R16.78/$ — a solid 7.5 cent gain on the day.
Tuesday: SA Inflation Surprises Lower 📉
Tuesday opened at R16.78/$ with markets in a holding pattern ahead of the main local event: November CPI from Stats SA...
...and the numbers didn't disappoint.
Headline inflation came in at 3.5% YoY — down from 3.6% in October and below the 3.6% consensus. Core held steady at 3.2%. More importantly, inflation expectations for Q4 dropped to record lows at 3.7%, firmly within the SARB's new 3% target framework.
The data reinforces what the market has been pricing: another 25bps cut at the 29 January MPC meeting. Food inflation did tick higher (meat prices up 12.2% thanks to the foot-and-mouth outbreak), but transport costs cooled sharply and the overall trajectory remains benign.
The Rand consolidated around R16.78-R16.82 through the session, closing at R16.72/$ — another 6.3 cents stronger.
Wednesday: Choppy Consolidation ⚖️
Wednesday opened at R16.72/$ and saw choppy, range-bound trade...
...with no major data releases on either side of the Atlantic to drive direction.
The pair tested weaker early, pushing up to R16.79, but found resistance there. Mid-session saw a drift back towards R16.72-R16.74 as markets positioned ahead of Thursday's US CPI print.
By the close, we'd settled at R16.75/$ — essentially flat, but holding the week's gains.
And in other news...
Silver Smashes All-Time Highs 🥈
While the Rand was making headlines, silver was rewriting the history books...
...touching $66.87 per ounce this week — a fresh all-time high that finally, definitively surpasses the 1980 Hunt Brothers peak.
That's up roughly 128% year-to-date, making 2025 silver's strongest year since 1979. To put it in perspective: gold has had an impressive run (up ~60% YTD), but silver has more than doubled it.
What's driving the surge? The same forces helping the Rand: Fed rate cut expectations, a softer dollar, and — in silver's case — a structural supply squeeze now in its fifth consecutive year of deficit. Industrial demand from solar panels, electric vehicles, and data centres continues to outstrip mine production. ETF holdings are at their highest since July 2022.
Analysts are now talking about $100 silver in 2026...
...but this is when to be careful to not be caught up in the hype, which often happens when the market reaches an extreme.
US-SA Tensions Escalate...
The diplomatic theatre continued this week...
...with South Africa deporting seven Kenyan nationals on Tuesday who had been processing US refugee applications in Johannesburg — allegedly entering on tourist visas while working illegally.
The White House responded with Secretary of State Marco Rubio accusing SA of "harassing and doxxing" US government staff, which follows the G20 exclusion announced in late November, 30% tariffs slapped on SA goods in August, and the ongoing rhetoric.
What is interesting here was the Rand's reaction to all this geopolitical noise?
It strengthened 12 cents.
Why? Because the market has already priced in the deteriorating relationship.
But that said, things could change if it actually started affecting trade flows or sanctions escalations.
Rand's Best Year Since 2009 📈
The bigger picture here is remarkable...
...the Rand has gained over 10% against the dollar in 2025, putting it on track for its strongest year since 2009.
What's driving it? The new 3% inflation target (formally adopted on 20 November), improved fiscal credibility, the FATF grey list exit in October, and elevated commodity prices — particularly gold near all-time highs.
Bloomberg noted this week that the lower inflation target is reshaping long-term expectations, with 10-year bond yields at 2017 lows.
There is a chance it could test lower before yearend, which would cap off an extraordinary turnaround from the R19+ levels we saw earlier this year.
Thursday: CPI Shocker Sparks Rally ⚡
Thursday opened at R16.75/$ and early trade was quiet...
...but everything changed at 15:30.
US CPI landed at 2.7% YoY for November — a massive beat against the 3.1% consensus. Core came in at 2.6%, the lowest since March 2021. Markets erupted. The S&P 500 jumped 0.8%, Nasdaq surged 1.4%, and the dollar weakened across the board.
Inflation beaten! Fed will keep cutting! But what is the reality?
October data was never collected due to the shutdown. November collection only started on 14 November — two weeks late. Fed officials have acknowledged "technical factors" likely pushed the reading down by around 0.1%. The data quality is... questionable at best.
Still, markets traded the headline (they always do). The Rand pushed through R16.70/$ for the first time since August 2022, touching R16.69 — the week's best level and a genuine 3-year milestone.
We closed Thursday at R16.72/$ — down 3.2 cents from the intraday best, but firmly in new territory.
Friday: BoJ Hikes, Rand Holds Gains 🇯🇵
Friday opened at R16.72/$ with Asian markets digesting the Bank of Japan's rate decision...
...a 25bps hike to 0.75%, the highest level in 30 years.
The move was widely expected, but the yen actually weakened afterward — markets were hoping for more aggressive forward guidance. Governor Ueda indicated more hikes are likely if the economy stays on track, but real rates remain "significantly negative."
For the Rand, the global rates backdrop remains supportive. With the Fed pausing, BoJ finally normalising, and SARB expected to cut further, the carry trade dynamics continue to favour the local unit.
The pair drifted slightly weaker through Friday's session, testing up to R16.79 before settling at R16.74/$ for the close — a 2 cent loss on the day, but preserving the week's gains.
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Volatility & Risk Analysis
The Rand's third consecutive week of gains came with relatively muted volatility...
...as markets digested delayed data rather than reacting to fresh shocks.
- Open to Close Move: The week opened at R16.86/$ Monday morning and closed Friday afternoon at R16.74/$ — a 12c (0.70%) strengthening.
- Average Daily Range: ~10c (0.6%)
Risk per $1 Million Exposure: R100,000 - Maximum Single-Day Move: ~12c (0.7%) on Monday
Risk per $1 Million Exposure: R120,000 - Weekly Range: 20c (R16.69 low to R16.89 high) — 1.14% swing
Risk per $1 Million Exposure: R200,000
For importers, these are levels not seen in over three years — an opportunity to lock in favourable rates heading into the new year.
For exporters, the question becomes: how much further can this run?
One thing to remember: the Rand often changes trend around yearend.
The Week Ahead (22-27 December 2025)
- SA: Markets thin ahead of Christmas (25 Dec), Year-end positioning
- US: Durable Goods, Consumer Confidence, Markets closed 25 Dec
- Global: Thin holiday trading, Year-end rebalancing flows
What to Watch: With most major data already released and Christmas falling mid-week, expect thin liquidity and potentially exaggerated moves. The focus shifts to year-end portfolio rebalancing and positioning ahead of January's SARB decision (29 Jan). Any surprise developments could move markets more than usual given reduced volumes.
UNDERSTANDING WHAT MOVES MARKETS
This past week is again a timely reminder that negative news does not always mean Rand weakness...
...in fact, this was exactly the opposite where there was plenty of negativity coming from across the Atlantic with some significant repercussions, yet the Rand just shrugged it off.
Bottomline: The trigger is never the whole story...
...direction comes from understanding the underlying forces.
If you're tired of being whipsawed by headlines and want to understand what's really driving markets...
...The Market Demystifyer cuts through the noise:
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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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Every forex strategy has an inherent risk...
...but a fixed or arbitrary strategy guarantees it!
Because currency markets move in cycles...
...and so should your forex strategy.
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.
That's not luck.
That's systematic forecasting based on a combination of sentiment cycles, Elliott Wave, momentum, wave ratios & relationship studies, momentum and supply & demand...
...the same system that's kept us and our clients ahead of the curve for years.
Want to see where the Rand is headed next?
To get a look at the latest forecasts, use the link below:
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If you have any questions or feedback, please leave them below.
To your success~
James Paynter
P.S. Having a rough time with the market's moves? Feel free to book a call. I would love to see how we could help with your present strategy - and save you some time, stress and money in the process.
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