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Money Market FundsThe first weekly market update of 2026 opened with heightened geopolitical tension following a surprise U.S. operation in Venezuela over the weekend. The intervention, which resulted in the removal of President Nicolás Maduro, has drawn global attention not only for its political implications but also for its strategic significance in global energy markets. Venezuela holds the world’s largest proven oil reserves, supplying a type of heavy crude that has become increasingly scarce due to sanctions on Russia.
According to TreasuryONE currency strategist André Cilliers, demand for this specific grade of oil has been rising steadily since the 1980s, while supply options have narrowed. With Russian oil effectively sidelined by sanctions, Venezuela has emerged as a critical alternative supplier—particularly for large buyers such as China and Russia. While the move has sparked diplomatic backlash and is expected to be debated at the UN Security Council, markets have reacted with relative calm, reflecting the broader context of U.S. dollar weakness rather than event-specific risk.
The muted market response highlights a deeper structural shift underway. The U.S. dollar remains under pressure amid rising government debt, ongoing political uncertainty, and a notable reallocation of global reserves away from the dollar. Central banks have continued to increase gold holdings, while the share of global reserves held in U.S. dollars has fallen to around 40%—one of the lowest levels in decades. These dynamics, rather than the Venezuela operation alone, are shaping currency sentiment entering 2026.
Against this backdrop, the South African rand enters the new year from a position of strength, having appreciated roughly 14% over the past year. While further gains are expected to be more measured, continued dollar softness could still support the currency. TreasuryONE expects rand performance in 2026 to flatten relative to last year’s strong gains, with incremental strength rather than another outsized move, as global macro forces remain the dominant driver.