11/18/2014 08:21 EST | Updated 01/18/2015 05:59 EST

Loonie lower: traders look to positive German data, Keystone Senate vote

TORONTO - The Canadian dollar closed lower Tuesday amid declining oil and metal prices and data showing rising business confidence in Europe's biggest economy.

The loonie was down 0.03 of a cent at 88.5 cents US.

The ZEW institute said its investors' confidence index rose by 15.1 points in November, bringing it back into positive territory with a reading of 11.5. That is still far below its long-term average of 24.4 points and ZEW head Clemens Fuerst warned that "the economic environment remains fragile, not least due to ongoing geopolitical tensions."

Germany posted 0.1 per cent third-quarter growth, avoiding recession after a second-quarter contraction.

The data was a relief to markets since a string of downbeat economic reports suggesting Germany could drop back into recession helped spark the October sell-off on stock markets.

Oil prices continued to hover around the US$75 a barrel mark with the December contract down $1.03 to US$74.61 a barrel.

Meanwhile, the U.S. Senate was expected to vote Tuesday night on TransCanada's (TSX:TRP) Keystone XL pipeline proposal. Pipeline supporters need 60 votes but it's not clear that they have the numbers.

The pipeline was approved last week for the ninth time by the Republican-dominated House of Representatives, but it faces a tougher test in the Senate, which under the control of the Democrats until a new session begins next year. Even if the legislation does pass, President Barack Obama is expected to veto the measure.

The December gold contract gained $13.60 to US$1,197.10 an ounce while the December copper contract fell four cents to US$3 a pound.