Sterling slipped against the dollar this morning, with a suicide bombing in Manchester and concerns over the ruling Conservative Party's campaign for next month's election putting the currency on the defensive.
The pound fell as low as $1.2954 in morning trade, down 0.3% on the day, before recovering to trade only slightly lower at $1.2989.
Analysts said the key message about sterling is that it is on the defensive this week and this trend is likely to continue.
The pound was 0.2% lower at 86.61 pence per euro this morning, however, it has since strengthened slightly.
Global financial markets react to Manchester terror attack pic.twitter.com/dMtwNqLJIN
— RTÉ Business (@RTEbusiness) May 23, 2017
In an unexpected twist to the election campaign - suspended after the bombing - a pair of weekend polls showed Prime Minister Theresa May's Conservatives' lead halving over the opposition Labour Party.
This pulled the pound lower from its perch near seven-month highs yesterday.
Meanwhile, there appeared to be little direct market impact from the attack in Manchester this morning, although shares of theme park operator Merlin Entertainments were off around 1%.
European markets reversed their opening losses to stand marginally higher this morning.
London's FTSE was up 0.1%, while the Paris CAC added 0.6% and the Frankfurt DAX gained 0.3% in mid-morning trade.
Dublin's ISEQ index was also higher, adding 0.2%.
