Exchange rate, interest rate and commodity price trends

EXCHANGE RATE TRENDS

For 2025, we expect the euro to appreciate slightly against the US dollar and the pound sterling. We expect the Chinese renminbi to remain at a similar level against the euro as in the reporting year. The Brazilian real, the Mexican peso, the South African rand and the Turkish lira are expected to depreciate against the European single currency to varying degrees; the Argentinian peso is expected to depreciate strongly due to the ongoing critical economic situation in Argentina.

We assume that on average the euro will remain flat against the US dollar between 2026 and 2029. We project that the European single currency will be largely stable against the pound sterling, the Chinese renminbi, Brazilian real, and Turkish lira, while the comparative weakness of the Mexican peso and the Argentinian peso will probably continue. However, there is still a general event risk, defined as the risk arising from unforeseeable market developments.

INTEREST RATE TRENDS

Although almost all major western industrialized countries and many emerging markets made their first key interest rate cuts in 2024, further changes in key interest rates in 2025 in the respective countries will depend firstly on further inflation developments and secondly on the scale of a possible economic downturn. Overall, we expect a somewhat lower interest rate level on average in 2025 compared to 2024.

We estimate that, on the whole, interest rates will persist at this level between 2026 and 2029.

COMMODITY PRICE TRENDS

We anticipate prices for almost all raw materials to rise in 2025 given the expected growth of the global economy and the associated demand.

We anticipate continued volatility in the commodity markets at slightly higher prices in some cases for the period from 2026 to 2029.