"The German economy has shown few signs of picking up strongly again after the sharp contraction of economic output in the last quarter of 1998. . . The outlook for the German economy, which was hit relatively hard by the global economic slowdown due to its reliance on the manufacturing sector, is particularly uncertain at the moment."

Market Research has indicated overall that the state of the German economy is weak due to the economic global slowdown.  Key information includes:

 - slight increase in unemployment
 - weakening of Consumer Confidence, thereby limiting consumer spending, one of the expected main drivers of growth
 - predicted GDP growth of just 1.7%

However there are some positive figures that help the German economy and Deutsche Mark recover. They include:

 - A 0.5% cut in Euroland Interest Rates
 -  Cuts may support the Euro, which has depreciated 8% in value vs. the U.S. dollar since its inception
 - Improving economic outlook after rocky introduction of the Euro

Sources: PriceWaterhouseCoopers, Reuters

After considering the information gathered with respect to the Deutsche Mark, we are fairly confident that the Deutsche Mark will weaken versus the U.S. Dollar between now and June, 1999.

With respect to the volatility of the D-Mark, given that we are not entirely confident with view on direction and that the price movement chart below indicates a wide range of prices over the last year, it is our opinion that there will be high volatility.
 

Source: www.barchart.com/cme   In short:  Our market view of direction and volatility is up and unsure.