The pound slumped on Friday, as uncertainty over Brexit negotiations and its impact on business and the economy followed the result of the UK general election.
Sterling shed 1.7% to $1.2733 against the dollar, and was down 1.5% to €1.1384 against the euro.
Investors sought the safety of the bond market, pushing prices higher and forcing yields on the benchmark 10-year Gilt to retreat by about 5 basis points to 1.01%.
International stocks rise
UK stock markets were mixed, however, as the FTSE 100 – laced with international companies that would welcome a softer Brexit – gained nearly 1%.
The FTSE 250 – where the constituents are much more domestic focused – slipped 0.2%.
Theresa May, prime minister, called the snap election in April, hoping that favourable poll ratings would translate into a landslide victory at Thursday's election.
The Conservative party however was eight seats short of the 326 needed to carry it over the winning line.
May needed a coalition partner to gain a Commons majority – and the resulting Conservative and Democratic Unionist partnership looked a rather weak option to the markets.
David Lamb, head of dealing at FEXCO Corporate Payments, said: "The Prime Minister had hoped to begin Britain's Brexit negotiations this month with a thumping mandate and a spring in her step.
“Instead she will do so walking on eggshells and looking nervously over her shoulder for cabinet members wielding knives."
He concluded: “In short, everything the markets didn’t want from Britain’s Brexit negotiators."
Miners in favour
The weaker pound and hopes that a minority government will soften the UK's approach to Brexit negotiations helped boost the shares of those companies with international sales.
Miners were among the big gainers, with Fresnillo and BHP Billiton both more than 2% higher. Those companies dominated by domestic sales sank, however. Clothing group Next and rival Marks & Spencer both shed around 2%. Banks were also lower.
Markets in Europe were broadly higher, but not overwhelmingly so: France's CAC 40 and Germany's Xetra Dax both added 0.7%.
Richard Berry at BerryFX said: "With Brexit negotiations due to start in little over a week, many in Brussels will be secretly licking their lips at the prospect of Britain’s weakened leader kicking off the process in shame rather than with a swagger."