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Market rates at publication:GBP/EUR: 1.1706 | GBP/USD: 1.3844Bank transfer rates: 1.1475 | 1.3556Specialist transfer rates: 1.1643 | 1.3775Get a bank-beating exchange rate quote, hereSet an exchange rate alert, hereA sudden deterioration in global market sentiment ahead of the weekend reignited demand for safe haven currencies at the expense of the British Pound.

The Pound had been pushing higher against the Euro and Dollar but news that the U.S. will pressure China over subsidies saw risk sentiment deteriorate.

Major stock markets relinquished gains as investors pared exposure on news that the Biden administration is weighing a new investigation into Chinese subsidies and their damage to the U.S. economy.

A Bloomberg reports said the move was a way to pressure Beijing on trade, igniting fears amongst investors that a new deterioration in relations between the world's two largest economies looms.

The Dollar, Yen and Franc - the traditional safe haven currencies - benefited on the about-turn in sentiment.

Those currencies that tend to perform well when markets are rising - examples include the Australian Dollar and South African Rand - pared earlier gains.

The Pound sits in the middle of the risk spectrum and gave back earlier advances against the Euro and Dollar.

Above: GBP/EUR and the S&P 500 index turn lower in tandem.

The Pound and other 'risk on' assets had moved higher on Friday on news that Biden had called Chinese President Xi Jinping in an attempt to improve relations.

The leaders reportedly spoke for 90 minutes on Thursday night, their first discussion since February.

"Helping sentiment was news on Thursday that US President Joe Biden and Chinese leader Xi Jinping held a phone call. This led to speculation of truce between the two nations, after relations had come under significant strain under the Trump administration," says Fawad Razaqzada, Market Analyst at ThinkMarkets.

"The Chinese yuan rallied, which helped to provide tailwind support to other EM currencies, as well as the Aussie and Kiwi dollars," he adds.

The Pound-to-Euro exchange rate returned to 1.17, having been as high as 1.1736 earlier in the day.

The Pound-to-Euro exchange rate returned to 1.3846 having been as high as 1.3889.

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The move lower by the Pound serves as a timely reminder that there are numerous drivers controlling the currency's movements at the present time.

Pound Sterling Live in an earlier report identified four of positive developments that had helped Sterling turn higher in the second-half of the week gone by.

1) The Pound extended earlier gains to three-quarters of a percent against the Euro following the European Central Bank's (ECB) September policy meeting.

2) A Bank of England Rate Hike is Coming.

BoE Governor Andrew Bailey said on Wednesday that half of the members of the Monetary Policy Committee already believe the minimum conditions for a rate hike are now in place.

3) The negative reaction to UK tax hikes was overdone

The Pound fell mid-week following news of tax hikes by the UK government, but the move proved overdone.

"Despite the potential risks to growth from a higher taxation base, the fiscal responsibility could support Sterling," says Charles Porter, foreign exchange analyst at SGM Foreign Exchange Ltd.

4) The economic recovery gathered steam in Early September

Perhaps the most important positive driver behind recent GBP movement are short-term data and surveys suggesting the UK economic rebound is accelerating once more.

With self isolation rules having been relaxed in mid-August and the end of school holidays falling in the first week of September people are returning to their offices.

The ONS’ Business Impact of Covid-19 survey points to a 1.2% month-to-month increase in business turnover in August, having signalled only a 0.6% rise in July.

Restaurant diner numbers, footfall at retail locations and transportation usage all picked up in August according to data from OpenTable, Springboard and Apple, respectively.