03/17/2015 08:32 EDT | Updated 05/17/2015 05:12 EDT

Loonie little changed amid weak manufacturing reading, sliding oil prices

TORONTO - The Canadian dollar closed little changed Tuesday amid a weak reading on the manufacturing sector.

The loonie was ahead 0.02 of a U.S. cent to 78.27 cents 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 US$40-a-barrel mark. On Tuesday, April crude on the New York Mercantile Exchange was down 42 cents to US$43.46, its sixth straight day of losses.

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

Prices had found support around US$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 $5 to US$1,148.20 an ounce while the May copper contract fell three cents to US$2.63 a pound.