The pound euro exchange rate is now 0.6% higher with GBP EUR at 1.1389.
The pound dollar exchange rate is 0.21% higher with GBP USD at 1.6167.
The fortune of the British Pound continues to be locked to the performance of stock markets.
Any drop in the FTSE 100 is usually mirrored by a spike in the fortunes of the pound against the euro.
The reason is that the pound is being seen as a safe asset, and every time the markets are struck by fear over Eurozone debt the pound is a beneficiary.
There is widespread speculation that France will suffer a downgrade in its AAA credit rating, renewing concern that Europe's sovereign debt crisis is spreading to the larger economies in the Euro-zone. RBS Plc and HSBC Holdings Plc lost more than 5% in London trading, as the benchmark FTSE 100 Index tumbled more than 3.1%.
Global stock markets rallied earlier in the day, after the Federal Reserve pledged to keep interest rates low until the middle of 2013.
The short-term relief didn't last too long and the volatility engulfing world markets continued with aggressive swings in risk sentiment having a big impact on exchange rates. The Pound traded down to a low of 1.6114 against the Dollar and 1.1340 versus the Euro in choppy trading conditions.
