The Pound has edged down from multi-month highs against the Euro and has fallen against the Dollar.
The Pound-to-Euro exchange rate dropped under the 1.18 level having reached 1.1833 earlier in the week, whilst the Pound-to-Dollar exchange rate prolonged its August decline to hit 1.3833.
Whilst UK fundamentals are generally supportive, as seen by the better-than-forecast GDP data published on Thursday, when investor nerves impact stock markets, the Pound is often on the back foot.
"What is likely to matter more for EURGBP during the balance of August is the extent of risk appetite in global financial markets. We would say that this factor, in the context of investor positioning, has been the biggest detriment to further downside in the pair," said Stephen Gallo, European Head of FX Strategy at BMO Capital Markets.
In addition, as per new research from HSBC, the Euro is increasingly becoming a 'risk off' currency and less of a 'pro cyclical' currency.
"For many years, the EUR was seen as a cyclical play, which benefited from strong global growth. However, the last decade or so has seen overseas asset accumulation outstrip inflows from foreign investors. This could start to change the way in which the EUR behaves. One rationale for the safe haven behaviour of the likes of the CHF and JPY is that they have sizeable foreign assets that can be repatriated during times of crisis," according to Paul Mackel, Global Head of FX Research at HSBC.
However, all trends in markets remain higher, with investors likely to view any dips as temporary, signalling the trend in stock markets and several Pound exchange rates stays up.
"With equity markets hitting new highs and bonds remaining quiet, it seems that the Euro will continue to be used as a funding currency for riskier positions elsewhere on an ongoing basis," said Jeremy Thomson-Cook, Chief Economist at Equals Money. "We remain bearish on the Euro and see GBP/EUR moving towards 1.1940."
At the time of writing, the market rates stood at: GBP/EUR: 1.1767 and GBP/USD: 1.3812.