Exchange rate, interest rate and commodity price trends


In 2020, the euro appreciated slightly against the US dollar on an annual average. It also rose against sterling. The euro/ sterling exchange rate in 2020 was affected by high uncertainty about the outcome of the negotiations on the United Kingdom’s exit from the EU and the shape of future relationships. Against the currencies of some emerging markets, the euro appreciated considerably in some cases. In particular, the Argentinian peso, Brazilian real, South African rand, Russian ruble and Mexican peso lost value against the European single currency. The currencies of Asian emerging markets also weakened overall against the euro on an annual average. For 2021, we are forecasting that the euro will strengthen against the US dollar, sterling and the Chinese renminbi. The Argentinian peso, Brazilian real, Mexican peso, South African rand and Russian ruble will most likely continue to depreciate. For 2022 to 2025, we expect that the euro will be stable against the key currencies, but that the comparative weakness of the currencies in the aforementioned emerging markets will probably continue. However, there is still a general event risk – defined as the risk arising from unforeseen market developments.


The challenging macroeconomic conditions, including as a result of the Covid-19 pandemic, resulted in globally falling interest rates in fiscal year 2020. National central banks both in the major Western industrialized nations and in emerging markets cut key interest rates, in some cases on multiple occasions, and also introduced additional expansionary monetary policy measures to support their economies. In March 2020, the US Federal Reserve cut the key interest rate to almost 0% in the space of just a few days, while the European Central Bank also left its key interest rate at zero. We expect these policies to generally continue in 2021 and therefore consider it currently unlikely that interest rates will rise in the USA or Europe. In the period from 2022 to 2025, we expect no more than a slight increase in interest rates.


The global spread of the coronavirus (SARS-CoV-2) has also affected commodity markets. The associated restrictions and the resulting downturn in demand and supply, reduced the prices of many raw and input materials in the first half of 2020. However, the prices recovered markedly in some cases over the course of the year. Compared with the previous year, there was a fall in the average prices for raw materials such as crude oil, coking coal, lead, aluminum and natural rubber, while prices for iron ore, rare earths and the precious metals rhodium and palladium rose and copper and platinum prices were more or less unchanged. Prices for the raw materials that are relevant for e-mobility also developed unevenly: average prices over the year for lithium and cobalt fell, while nickel prices were more or less on the prior-year level. Based on analyses of factors of influence and trends in the commodity markets, we expect the prices of most commodities to rise in 2021. For the years 2022 to 2025, we continue to expect volatility in the commodity markets with prices trending both upwards and downwards.