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Loonie has biggest drop in four months

TAVIA GRANT
Wednesday, November 01, 2006
The Canadian dollar had its biggest one-day drop in more than four months Wednesday after Finance Minister Jim Flaherty said yesterday he plans to start taxing foreign investors who own income trusts.

“Speculation that overseas holders — around 22 per cent of outstanding income trusts — could pull out of the markets will keep the Canadian dollar under pressure,” said Matthew Strauss, senior currency strategist at RBC Capital Markets, in a note.

The loonie traded at 88.09 cents (U.S.) from yesterday's close of 89.04 cents. It was the biggest one-day drop since June 13.