The final two weeks of 2025 saw global sentiment oscillating between optimism and caution, depending on the news flow. US GDP for Q3 surprised with its strength, but other indicators suggested elements of weakness in the US economy. Nonetheless, equity prices closed near all-time highs. The Rand firmed to its best level in three years, helped by a continuing weak Dollar and expectations of further US rate cuts. In addition, high precious metals prices supported the Rand, although prices experienced a correction just before the new year. South Africa’s trade surplus rose to its best level in almost four years.

All these developments are likely to be eclipsed at the start of the new year by potential volatility emanating from the implications of the sudden US attack on Venezuela and capture of its president this past weekend. Precious metals prices will likely react favourably, whilst, conversely, oil prices could tumble due to potential oversupply if Venezuela’s oil industry returns to its former substantially higher production levels over time. Positively, low oil prices and a strong Rand will see fuel prices fall to their lowest levels in almost four years this week, with favourable implications for potential further interest rate relief.