The median forecast of 47 contributors surveyed by Bloomberg is for the loonie to trade at 98 cents by the end of fourth quarter.
Elsewhere in credit markets, Canadian Imperial Bank of Commerce, the nation’s fifth-biggest bank, issued C$1 billion of five-year notes with a coupon of 2.22 percent.
The extra yield investors demand to own the debt of Canadian investment-grade corporations rather than the federal government was unchanged yesterday from March 1 at 127 basis points, or 1.27 percentage points, according to the Bank of America Merrill Lynch Canada Corporate Index. Yields were little changed at 2.83 percent, the data show.
Provincial bond spreads held steady at 73 basis points, while yields declined to 2.51 percent, from 2.52 percent on March 1, according to the Bank of America Merrill Lynch Canadian Provincial & Municipal Index.
Consumer Prices
Corporate bonds have returned 1.1 percent this year, compared with gains of 0.2 percent by provincial bonds and 0.1 percent by federal government securities, Bank of America Merrill Lynch data show.
Inflation at the lowest level since 2009 and a gloomier outlook prompted Canadian Imperial Bank to delay the bank’s call for a rate increase until the third quarter of 2014 from earlier in the year. Consumer prices rose 0.5 percent in January from a year earlier, Statistics Canada said Feb. 22.
“The tightening bias is not convincing the markets that the bank is going to move anytime soon,” Emanuella Enenajor, an economist at CIBC World Markets in Toronto, said in a telephone interview yesterday. CIBC expects the central bank to maintain its bias in tomorrow’s policy statement.
‘Too Bearish’
Economists surveyed by Bloomberg predict the Bank of Canada won’t raise its 1 percent overnight target rate by this year. In January, the forecast called for a quarter-percentage point increase at the end of the year.