Jul 19, 2023 Market Outlook

Euro should continue to appreciate

Market outlook | Currencies & Alternative Investments

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Currencies

Euro/Dollar

Euro should continue to appreciate

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  • The Euro should have some scope for further appreciation versus the dollar.
  • Arguments in favor of a stronger euro: expected better economic development in the Eurozone versus the United States and the presumably more restrictive monetary policy in the Eurozone. We expect the European Central Bank to remain on its hiking path for longer than the U.S. Federal Reserve.
  • Our euro/dollar exchange forecast by June 2024: 1.12.

<h2>Alternative assets</h2>
<h3>Gold</h3>
<p><b>Short-term under pressure due to speculations on rates, medium-term looks promising</b></p>
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<li>The gold price has come under some pressure recently, particularly due to the excellent U.S. labor market data, fuelling expectations that the Fed might remain on its hiking path for longer than previously expected.</li>
<li>The trend towards a weaker dollar should, however, support the gold price. Additional support should come from the permanently high demand of gold from the central banks of emerging market countries.</li>
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<p>*Forecasts are based on assumptions, estimates, views and hypothetical models or analyses which may prove to be incorrect. Past performance is not indicative of future results. Source: DWS Investment GmbH, as of 10 July 2023</p>
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Legend

The strategic view by July 2024

The indicators signal whether DWS expects the asset class in question to develop upwards, sideways or downwards. They indicate both the short-term and the long-term expected earnings potential for investors.

Source: DWS Investment GmbH; CIO Office, as of 10 July 2023

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  • Positive return potential
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  • Potential profits but also risk of loss rather limited

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  • Negative return potential

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