Loonie little changed as oil resumes downward slide

The Canadian dollar was little changed Tuesday amid a weak reading on the manufacturing sector.

The loonie added 0.09 of a U.S. cent to 78.34 cents (U.S.) as Statistics Canada said manufacturing sales fell 1.7 per cent in January due to a sharp drop in petroleum and coal products.

The result compared with what economists had expected would be a drop of 1.2 per cent.

Meanwhile, traders speculated about the outcome of this week's U.S. Federal Reserve meeting.

The Fed starts its two-day meeting on interest rates Tuesday. The main item traders are looking for is whether the central bank removes the reference to being "patient" about hiking rates from near zero.

Supply issues continued to drive the price of crude closer to the $40-a-barrel mark. On Tuesday, April crude on the New York Mercantile Exchange was down 92 cents to $42.96 a barrel.

Prices have come a long way down since hitting around $107 a barrel last summer. Since then, global markets are awash in an oversupply of crude, inventories are at multi-year highs and the new concern is that storage space is becoming scarce.

Prices had found support around $50 but the International Energy Agency warned last week that the recent stability in prices around was likely premature.

Other commodities were lower with the April gold bullion contract down $2.90 to $1,150.30 an ounce while the May copper contract fell four cents to $2.63 a pound.