Exchange rate, interest rate and commodity price trends


In 2019, the euro lost ground against the US dollar on an annual average. The euro/sterling exchange rate remained stable overall, despite some volatility amid continued high uncertainty about the outcome of the Brexit negotiations with the EU and the related question of what form this relationship would take in the future. The currencies of Asian emerging markets , the Russian ruble and the Mexican peso also posted gains against the euro in the reporting period, in contrast to the Argentine peso, the Brazilian real and the South African rand which posted losses. For 2020, we are forecasting that the euro will strengthen against the US dollar, sterling and the Chinese renminbi. The expectation is that the Brazilian real and Indian rupee will remain relatively weak. The Russian ruble will probably be unable to maintain the recent positive gains. For 2021 to 2024, we expect that the euro will be stable against the key currencies, but that the comparative weakness of the currencies in the above-mentioned emerging markets will probably continue. However, there is still a general event risk – defined as the risk arising from unforeseen market developments.


Interest rates remained comparatively low with a few exceptions in fiscal year 2019 due to the continuation of expansionary monetary policies worldwide and the challenging overall economic environment. In the major Western industrialized nations, key interest rates persisted at a low level on the whole. The US Federal Reserve changed course in the summer in an effort to shore up the economy, cutting its key interest rate after several years of successive increases. The European Central Bank continued its expansionary monetary policy. In the light of further expansionary monetary policy measures, we currently therefore do not expect interest rates in the USA and the eurozone to rise in 2020. For the years 2021 to 2024, however, we anticipate a rise in interest rates, though the pace will vary from region to region.


Geopolitical and economic uncertainty in different forms caused the prices for many raw and input materials to vary in 2019. For example, average prices for raw materials such as crude oil, aluminum, lead, copper and coking coal fell, while prices for iron ore, rare earths, natural rubber and the precious metals palladium and rhodium, among others, rose. Prices for the raw materials that are relevant for e-mobility also developed unevenly: average prices for lithium and cobalt fell, while nickel prices were up 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 2020. For the years 2021 to 2024, we continue to expect volatility in the commodity markets with prices trending upwards. We preventively analyze and limit these risks using system-based procurement methods. Long-term, stable supply agreements ensure that the Group’s needs are satisfied and guarantee a high degree of supply reliability.