Sterling tumbled against the euro as the single currency has emerged as the markets’ safe haven of choice when faced with a potential war across the Pacific.

A pound now buys €1.0763, down 0.31pc today. At some points it fell below €1.075, matching intra-day lows last seen in October 2009 and approaching the all-time lows experienced at the height of the financial crisis in late 2008 and early 2009.

The euro was already performing strongly this summer as economic growth picks up in France, Germany and their neighbours, while economists expect the European Central Bank to lay out plans for rolling back quantitative easing which will also support the currency.

“The location of the [potential North Korean] conflict and the parties involved make the euro, rather than the US dollar, the preferred safe haven currency of choice,” said FX analyst Jane Foley at Rabobank.

“The result is further strengthening of the euro exchange rate this morning, with the euro breaking 40 pips through the big $1.20 threshold. Robust economic data from France this morning provided further platform for the liftoff of the euro.”