British Pound Rallies on Potential UK Protectionism

The British Pound came within an arms length of the psychologically important 2.0 level. Although there was no new data released, traders continued to be very excited about the potential for 6 percent interest rates by the end of the year.

It appears that the UK may be exercising their own form of protectionism. A UK paper reported that the government could restructure their tax rules to make it more difficult for UK companies to have the headquarters overseas. Even if this is true, it would take months to implement. The economic calendar is light but Prime Minister Tony Blair steps down next week, which will be a big focus.