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Written by Kathy Lien, Chief Strategist

 The British pound is stronger against the US dollar but interestingly enough, weaker against the Japanese Yen and Euro.  Economic data is not likely to blame as the larger trade deficit was met by stronger growth in house prices.  What did do the pound in were the comments from the UK Treasury.  Yesterday’s sharp rise in the currency was driven by speculation that the UK Treasury was discussing a proposal to allow UK firms to repatriate some of their international profits tax free.  We had warned that it was “only being discussed and has not been passed by the Treasury at the moment, so it could be some time before we actually see the flow.” Today, the Treasury responded by saying that any similar changes would not have an impact on revenue and indicated that this was something they have been discussing for some time.  Things like this are not decided on a whim and the market will soon forget about it until the change is official.