In 1960s, the USD/DEM exchange rate was stable, hovering around DEM 4=$1. But in 1973, DEM/USD exchange rate dropped below 3 (1973 DEM 2.659=$1), and in 1995, it was even below DEM 1.4=$1 at times, and at the time of virtual changeover to Euro (12/31/1998), it was DEM 1.67261=$1.
And in 1965, the Deutschmark was at 0.17% the fourth largest reserve currency in the world after USD (72.93%), British pound (25.76%) and French franc (1.11%). But by 1975, GBP had fallen to 3.42%, while DEM at 6.62% had risen to second largest where it would remain until Euro changeover - almost hitting 20% (19.83%) in 1990, and at the time of changeover in 1998 was 13.8%.
There are two factors that explain this: low amd stable inflation and a postive current account.
Let's start from the first: one of the critical elements in the downfall of the weimar republic had been the hyperinflation that Germany experienced that severly damaged the credibility of the state, thus when it came to rebuild the state after the second world war the german CB had a strong anti-inflationary bias. In fact, while other countries in europe and america used inflation to reduce the debt and stimulate the economy (it was widely believed at the time that inflation automatically increased output, the so called Philip curve, now we know that it is no so simple), Germany kept generally inflation under 5% with few peaks usually related to exogenous events (such as the oil crisis). This reinforced the idea of the mark as a strong and stable currency, and so while others devalued (the UK and Italy for instance often run inflation in the duble digits), the german mark remained fairly stable
Moreover Germany quickly recovered from the war and started to export its goods around the world in world, which caused the current account to be positive, this meant that money is flowing out of the country (to accumulate foreign assets), this increases the value of the currency because foreigners are buying it to buy your goods. Finally in the 1979, the members of the European community created the European Monetary system, a system of linked currency pegged to a virtual common currency and this forced CBs to accumulate marks to be able to sell it at a given rate. This explains both the appreciation of the mark and the increase in reserves of marks held at CBs.