By Gary Howes

The Canadian Dollar (CAD) remains well supported on Thursday thanks to an even-handed Bank of Canada interest rate decision and statement delivered the day prior.

The CAD remains firm on Thursday thanks to the Bank of Canada interest rate statement delivered on the previous day which gave no additional dovish sentiment for CAD bears to feed upon.

A look at the Canadian dollar exchange rate complex shows:

The bank maintained that they are data dependent regarding the next move in interest rates and noted once again that “with inflation expected to be well below target for some time, downside risks to inflation remain important.”

"Overall, the lack of additional dovish fodder is being taken as a slight positive for the loonie and we are at the bottom of the day’s trading range at present," says Jean-Pierre Doré at Western Union.

GBP-CAD is however predicted to remain supported, as mentioned in yesterday's Canadian dollar forecast update there is a pro-GBP bias at present, and the rate could reach 1.87 in 2014.

A break higher in the US dollar vs Canadian dollar possible

The USD-CAD continues to enjoy an underlying positive trend, FX Market Alerts say there is a chance barriers to further gains are broken today:

"USD/CAD continues to Though, we will still note that as long as the mkt holds the 1.1050/26 support zone in the hours ahead, the pattern setup still allows for a break higher through 1.1114 to 1.1159. Just have to wait and see now if this current range can be broken today."

According to Shaun Osborne at TD Securities, "USD/CAD may dip modestly on an “unchanged” statement but we expect losses to remain shallow and we would favour looking to fade the move if the initial reaction is lower. The underlying message will retain a dovish lilt after all."

According to TD Securities, the clear surprise for the markets this morning would be a very dovish, CAD-negative message that indicates policy makers are fully looking through the recent data reports.

"In that case, USDCAD would trade very quickly back to and likely through the low 1.12 area," says Osborne.