Source: The Canadian Press

The Toronto stock market appeared heading for a flat open to Tuesday’s session with commodity prices little changed ahead of an afternoon announcement from the U.S. Federal Reserve on interest rates and economic conditions.

The Canadian dollar moved higher against the U.S. dollar, up 0.18 of a cent to 99.42 cents US.

The U.S. dollar remained under pressure following a warning from credit rating agency Moody’s Investor Services that the U.S. could have a negative outlook put on its triple-A rating if it doesn’t get a handle on its borrowing over the coming two years.

U.S. futures pointed to a weak open with the Dow Jones futures off three points to 11,363, the Nasdaq futures up 4.25 points to 2,215 and the S&P 500 futures ahead 2.8 points to 1,239.

Analysts aren’t expecting much from the actual Fed meeting, with rates and the quantitative easing program to expand the money supply left unchanged.

But the accompanying statement will be closely assessed for any change in tone.

Most analysts think that the Fed will likely acknowledge the recent improving tone in the U.S. data and that the immediate outlook looks better since U.S. President Barack Obama agreed to compromise with Republicans to extend tax cuts for all Americans.

Though the tax compromise has increased the U.S.’s near-term growth prospects, there are worries about the impact on the public finances.

“Focus on the deficit threatens to be brought sharply into focus by Moody’s announcement that tax concessions could put the U.S.’s triple A status in danger,” said Jane Foley, senior currency strategist at Rabobank International.

Oil prices slipped as traders look to weekly U.S. crude inventory figures for signs demand could be improving.

Crude inventories likely fell three million barrels last week, according to analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos. The American Petroleum Institute is scheduled to announce its inventory numbers later Tuesday while the Energy Department’s Energy Information Administration reports its weekly supply data Wednesday.

The January crude contract on the New York Mercantile Exchange was off seven cents to US$88.54 a barrel.

The March copper contract on the Nymex was unchanged at US$4.20 a pound while February gold headed $9.90 higher to US$1,407.90 an ounce.

Earlier in Asia, Hong Kong’s Hang Seng climbed 0.5% and China’s benchmark Shanghai Composite Index gained 0.1%.

Japan’s Nikkei 225 stock average added 0.2% while Australia’s S&P/ASX 200 advanced 0.2%.

London’s FTSE 100 index added 0.19%, Frankfurt’s DAX dipped 0.1% while the Paris CAC 40 was down 0.17%.

In corporate news, Agrium Inc. (TSX:AGU) says it’s talking to “a number of interested parties” about selling the commodity management business of Australian grain producer AWB Ltd., which it recently acquired for $1.2 billion.