Although of limited market-moving potential, President Cyril Ramaphosa called on G-20 nations to move beyond geopolitical divisions and unite in addressing the world’s most urgent crises, including climate change, conflict, and economic instability. Speaking at the G-20 foreign ministers’ meeting in Johannesburg, he stressed that rising global tensions and a lack of consensus among major powers threaten an already fragile international order. As the first African nation to assume the G-20 presidency, South Africa has an opportunity to reshape global discourse, with Ramaphosa setting priorities on fostering international solidarity, reforming global institutions, alleviating the debt burden of developing nations, and mobilizing climate finance for a just energy transition.
Yet Ramaphosa’s vision faces resistance from Washington, where President Donald Trump’s administration has largely dismissed his proposals, prioritizing an “America First” agenda. US Secretary of State Marco Rubio boycotted the G-20 meeting in protest of South Africa’s focus on diversity, equity, and inclusion, while Trump himself has taken a firm view against South Africa’s land expropriation laws by cutting most aid to the country. US Treasury Secretary Scott Bessent has also opted out of the upcoming G-20 finance ministers’ summit in Cape Town, citing domestic priorities. Once a powerful forum that bridged advanced and emerging economies following the Asian financial crisis, the G-20 now faces increasing fragmentation, particularly over the response to Russia’s invasion of Ukraine.
ZAR Markets
The rand stabilised and recovered after this week’s budget drama, trading all the way back to the floor of its recent range just north of R18.3000/$ yesterday. At these levels, the balance of risks into the end of the week is tilted towards some topside drift, with a strong catalyst needed for the ZAR to continue appreciating. Note that the local currency is still finding some support in a broader gold market rally, which is supporting SA’s terms of trade. Gold is on track for its eighth consecutive weekly gain, driven by a confluence of factors, including global monetary easing, sustained central bank purchases, geopolitical uncertainty, and ongoing trade tensions. Beyond these immediate catalysts, the precious metal is becoming increasingly attractive from a structural standpoint, as soaring global debt raises concerns about long-term economic stability. With debt levels reaching unprecedented heights, inflation may become the only viable tool for eroding its real value – further enhancing gold’s appeal as a hedge against currency debasement and financial instability.
Global FX Markets
The yen pulled back on Friday after hitting a 2.5-month high following a jump in Japanese inflation. The yen had strengthened overnight, breaking through chart resistance at 150 per dollar and reaching as high as 149.285 per dollar. This came after Japan reported core inflation running at its fastest pace in 19 months for January. However, the yen retreated as Bank of Japan Governor Kazuo Ueda warned that the central bank could increase government bond purchases if long-term interest rates rise sharply. The euro rose 0.8% overnight and remained steady in Asia at $1.0504, while traders awaited a German election over the weekend, which polls predict will result in a conservative coalition victory. The U.S. dollar struggled, set for its third consecutive weekly drop, as traders recalculated expectations regarding President Donald Trump’s trade policies. Despite Trump’s 10% tariff on Chinese goods and plans to reimpose steel and aluminum levies, other threatened tariffs, including those on Canada and Mexico, were suspended or remained uncertain. Market participants who had previously built up large positions betting on a trade war started to withdraw as Trump’s actions appeared limited. Meanwhile, Trump’s remarks about a potential trade deal with China helped lift the Australian and New Zealand dollars. Despite recent interest rate cuts in both countries, the Aussie and Kiwi hit their highest levels of the year, with the Aussie rising above 64 cents and the Kiwi touching $0.5772.