It was a week that saw something of an about-turn on stock markets.

Having closed at record highs for nine days straight, the Dow Jones took a sharp dive southwards late on Tuesday night after Donald Trump unleashed his rhetorical salvo at North Korea.

The sell off has intensified and other stock markets have now followed suit.

Garret Grogan, Head of trading at Bank of Ireland Global Markets, said August was traditionally a quiet time so this had come as something of a surprise.

"The S&P500 is down 1.7% from Tuesday. We've seen similar moves in European markets. The real effect has been more local. South Korean equities are down about 5%, but they're down to June levels. The expectation in markets is that this crisis doesn't escalate."

He described the recent surge in US markets in particular as a 'Goldilocks environment' for equities.

"Volatility has been low, rates are low and growth has been good. This is a good environment for equities. The real story this year has been the dollar."

The greenback has been under pressure all year and the weakness has intensified in recent weeks.

"On a trade weighted basis, the dollar is lower by 7.5%. Against the euro, it's 13% lower because of the lack of inflation. The markets are expecting the Fed to slow down on rate hikes, even though more are scheduled this year and into next year. 

"The other reason it's lower is because the administration has failed to get meaningful reforms through," Mr Grogan said.

Recent currency moves have seen the euro strengthen with more gains possibly to come as markets eye better data out of Europe and now the ECB is hinting at a possible end to unconventional monetary policy.