Sterling has made up some ground today after hitting an eight-and-a-half-year low against the euro yesterday.
Ongoing uncertainty over Brexit negotiations as well as strong investor confidence had pushed the single currency through the 93-pence barrier for the first time since March 2009.
Today though the pound has risen more than a third of a percent against the euro, hovering around the 92.2 pence mark as of Wednesday evening.
Sterling has fallen more than 3% so far this month against the euro and is set for its fourth consecutive month of losses.
The euro has gained over 16 pence since the Brexit vote in June 2016, going from £0.7649 above 92 pence - a shift of more than 21%
Sterling is broadly flat against the dollar at $1.2906.
"We are staying away from the sterling for now as it remains a headline driven currency even though on a valuation basis it looks attractive," said Thomas Flury, global head of currency strategy at UBS Group AG.
Investors are focused on the third round of Brexit negotiations which started on Monday, with the European Union's chief negotiator saying he was concerned at the slow progress of the talks.
The British government has laid out a series of position papers that have outlined compromises over some of the issues likely to block progress in talks this year, but EU officials say Britain needs to settle its divorce bill with the bloc before a trade agreement can be discussed.
Morgan Stanley strategists said the sterling will likely weaken further against the euro until October's British party conference season when investors will be watching for any disagreements internally within the ruling Conservative party.
Dollar rise ahead of jobs report
The US dollar rose broadly after strong US economic data boosted expectations for a solid US jobs report on Friday.
The euro was on track for its biggest daily percentage drop against the dollar in nearly four weeks, of about 0.6%, putting it back below $1.20 after touching a more than 2-1/2-year high of $1.2069 yesterday.
It last traded at $1.1906.
The dollar gained after the Commerce Department said its second estimate of US gross domestic product showed that it increased at a 3% annual rate in the second quarter, its quickest pace in more than two years.