Oil extends losses, USD/JPY edges lower, markets fear growth slowdown

Crude oil prices continued to fall on Tuesday on oversupply fears and after downbeat manufacturing data raised concerns about sluggish global economic growth.

U.S. crude oil slipped 1.8 percent to $31.05 a barrel after losing as much as 7 percent overnight. Meanwhile brent April crude futures fell 1.6 percent to $33.69.

Oil faced fresh pressure after Chinese January manufacturing data on Monday showed activity contracted at the fastest pace since 2012.

The Australian dollar was down about 0.5 percent at $0.7075, though it held above its recent seven-year low of $0.6827.

As expected, the Reserve Bank of Australia held interest rates steady at a record low of 2.0 percent. Although the central bank was hopeful on growth prospects, it reiterated that there was scope for a further cut if needed to support the economy.

The US dollar was weaker against the yen and slipped about 0.3 percent to 120.65 yen. The greenback suffered after U.S. economic data on Monday showed manufacturing activity contracted in January for a fourth straight month.

The euro was up about 0.1 percent at $1.0899. The single currency’s gains were limited by the disappointing Eurozone manufacturing data as well as comments from European Central Bank President Mario Draghi. The markets expect the ECB to launch more stimulus in March and this would weigh on the euro.

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