The pound tanked on Friday as disappointing UK growth figures forced investors to question the likelihood of a Bank of England interest rate hike next month.
Sterling fell as much as 1.1% against the US dollar in the wake of the data, which showed gross domestic product (GDP) grew by just 0.1% - much worse than economists' predictions for a slowdown to 0.3% and down from 0.4% in the fourth quarter of 2017.
It was also the weakest quarterly growth since the fourth quarter of 2012.
By Friday afternoon, the pound was trading down 0.9% at 1.378 on the greenback, and slumped 0.9% versus the euro to 1.138.
Connor Campbell, a financial analyst at SpreadEx, said: "Sterling was severely shaken by the UK's first-quarter GDP reading, a troublesome figure made all the worse by the fact that the ONS warned March's Beast from the East - a potential get-out-of-jail=free card for Q1's abysmal growth - actually had 'very little impact' on the slowdown."
He added: "This immediately dealt a rather sizeable dovish blow to sterling, with a May rate hike from the Bank of England going from a near certainty at the start of the month, to a toss-up following Mark Carney's comments last week, to now an almost complete dead end."
But a weaker pound supported the FTSE 100, as many multinational companies are seen to benefit when foreign currencies are stronger.
London's blue chip index ended the day up 1.09% or 80.78 points at 7502.21 points.
It outperformed its European peers, with the French Cac 40 and German Dax ending the day up 0.5% and 0.6%, respectively.
Brent crude prices rose 0.2% to around 74.85 US dollars per barrel as investors continued to fret over tensions in the Middle East.
David Madden, a market analyst at CMC Markets, said: "There is talk President (Trump) will introduce sanctions against Iran, and that decision might be made next month.
"The oil market isn't too far away from multi-year highs given that Iran could be in line for financial punishment, some traders don't want to get caught short."
In UK stocks, RBS shares fell 4p to 268.4p, making it the worst performer on the FTSE 100 despite reporting a 206% rise in first-quarter profit to £792 million.
Investors were still nervous about a looming multibillion-dollar settlement with the US Department of Justice over claims that it mis-sold mortgage-backed securities in the run-up to the financial crisis.
Travis Perkins dropped 15p to 1,270p on news that the Wickes DIY chain owner suffered a 1.9% dip in general merchanting sales, which it blamed on weak consumer sentiment and weakness in the UK DIY market.
Shares in Merlin Entertainments jumped 16.3p to 363p after reporting that overall trading at its London division was in line with expectations, though the division was still being impacted by the wave of terror attacks last year.
The biggest risers on the FTSE 100 were DCC up 250p at 7,000p, Rentokil Initial up 9.5p at 306.5p, Burberry Group up 54p at 1,822p, and Scottish Mortgage Investment Trust up 13.6p at 474.6p.
The biggest fallers on the FTSE 100 were Royal Bank of Scotland down 4p at 268.4p, Next down 34p at 5,230p, Vodafone Group down 1.25p at 210.55p, and Croda International down 26p at 4,500p.
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