BUSINESS
04/03/2012 08:37 EDT | Updated 06/03/2012 05:12 EDT

Canadian dollar declines amid U.S. factory orders miss, dimmer Fed outlook

TORONTO - The Canadian dollar closed lower Tuesday amid declining oil prices and glum economic news.

The loonie dipped 0.01 of a cent to 100.97 cents US.

Oil prices backed off as U.S. Federal Reserve policy-makers said they are worried that recent strong gains in hiring could fizzle if U.S. economic growth doesn't pick up. Minutes of the Fed’s March 13 meeting show that members expressed those concerns before sticking with a plan to keep interest rates at record lows until at least late 2014.

The minutes also showed that only a couple of members want to take further steps to boost the economy, such as quantitative easing, which involves the Fed printing more money to buy up bonds.

Sentiment also softened following a disappointing read on U.S. factory orders. Businesses ordered more machinery and equipment from U.S. factories in February. Orders to factories increased 1.3 per cent in February, which offset a similar decline in January. But the showing fell short of the 1.5 per cent gain economists had expected.

Demand for so-called core capital goods, a gauge of business investment plans, rose 1.7 per cent. That was better than the government's preliminary estimate last week and followed a steep decline in January.

The May crude contract on the New York Mercantile Exchange declined $1.22 to US$104.01 a barrel after charging ahead more than US$2.

The May copper contract was unchanged at US$3.92. The Chinese data had helped send copper up a dime on Monday. China is the world's biggest copper consumer.

And the January bullion contract on the Nymex edged $7.70 lower to US$1,672 an ounce.