The wave of ups and downs in the Forex market did not bypass the exotic currencies in 2018. Let’s look at how analysts predict the performance of those ones, which suffered the most during 2018 - the Brazilian real and Turkish lira.
Nonfarm payrolls forecasts from banks
Today is the first Friday of the month and It means that we will receive the usual payrolls release from the US at 3:30 pm MT time. It comes at crunch time for Fed officials as they haven’t yet decided whether to raise rates three times this year or to introduce other tightening measures.
The US NFP is expected to be around 174K. This number is believed to be a strong consistent job gain which can satisfy Fed’s policymakers and allow them to hike two additional times this year. If we get significantly lower figures on the NFP and a bit higher unemployment rate, we will probably have to sell the greenback against its major peers as a speculation for Feds not to recourse to additional hikes in the near-term. An upbeat print (higher than 200K, for instance) and lower jobless rate could lead to the USD strengthening.
If we get a controversial report, we suggest you adopting a wait-and-see approach. You should wait for some minutes after the release to get a clearer view.
Forecasts from banks
DB analysts expect additional job gains from the report. The US labor market was in a quite good shape in the last two consecutive months. They estimate a total of 160K new jobs were created in previous month, but underline that risks are skewed to the upside, as Wednesday’s ADP report was ahead of market expectations.
The average hourly earnings are to increase 0.2% (annual increase will reach 2.7%).
The jobless rate will probably stay unchanged from the previous update at 4.7%.
ANZ strategists will have a closer look at the pace of wage growth. According to them, it is a key estimate watched by the Fed’s officials before they decide on the pace of rate hikes. Its forecasts for NFP are consistent with those that have been mutually agreed by other market analysts (around 180K).
There are some other non-verbal forecasts from major banks:
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USD/CHF remains weak across the board and stays strong with a bearish consolidation below the 200 SMA at H1 chart…
There's no any reversal pattern so far, so the market is likely going to test the nearest resistance area in the short term...