Canadian dollar delivers a 'pasting' on forex markets - but 1.03 proves handy support for US dollar, GDP ahead of expectations

A look at the spot market exchange rates, for reference's sake, shows:

The pound to Canadian dollar exchange rate is 0.06 pct higher at 1.5699.
The euro to Canadian dollar exchange rate is 0.33 pct lower at 1.3396.
The US dollar to Canadian dollar exchange rate is 0.12 pct higher at 10310.

Please Note: The above quotes are taken from the wholesale currency markets; your bank will affix their own discretionary spread to the numbers. However, an independent FX provider will guarantee to beat your bank's offer thus delivering you more currency. Please find out more here.

"USD/CAD has taken a bit of a pasting since Wednesday but the 1.03 area has provided the expected level of underpinning for the USD and it remains an important area of short and medium-term support. We look for bids in the 1.0305/15 area on the day. Resistance is 1.0370/80. We think the underlying USD/CAD trend is up. The CAD looks a sell versus the JPY as well," says Shaun Osborne at TD Securities.

The key data release for the Canadian dollar today is that of the latest GDP reading.

Canadian gross domestic product rose more-than-expected last month.

In a report, Statistics Canada said that GDP rose to a seasonally adjusted 0.2%, from 0.3% in the preceding month.

Analysts had expected GDP to rise 0.1% last month.

Month-end flows will be of importance to the forex markets today. Camilla Sutton at Scotiabank says month-end flows will probably work against the Canadian dollar:

"The last day of the month is sometimes impacted by passive equity portfolio managers rebalancing positions to benchmark weights.

"This month equities outperformed in most of Europe, the US and Canada with underperformance in Australia, Japan and Hong Kong.

"Accordingly as managers rebalance it could force some selling of EUR, USD, GBP and CAD and buying of AUD and to a lesser extent JPY as portfolios are re‐balanced back to benchmark weights."