There are calls from within the Conservative Party as well for a more open Brexit: Ruth Davidson - an ever-growing force in Conservative politics - says we must now "seek an open Brexit" putting the economy first.
The British currency dropped by 1.6 per cent against the dollar through the session to end the week at US$1.2746, having hit an eight-month high above $1.30 in mid-May when it still seemed that prime minister Theresa May's Conservative government would romp home with a much bigger cushion than the 12-seat working majority she had when she called the snap election in mid-April.
The FTSE 100 in London advanced 0.5% to 7,484.06, although the blue-chip index was tracing back from gains of more than 1% made earlier in the session.
That still left sterling down 1.7 percent against the dollar on the day and on track for its biggest one-day fall since last June, though that move was dwarfed by an nearly 8 percent dive the day after last June's European Union referendum.
May's Conservatives failed to win an outright majority in parliament. The exit poll predicted the ruling Conservatives would claim 314 seats in the 650-member parliament and the opposition Labour Party 266, leaving no clear victor when markets had assumed May would easily increase her majority. However, if pressure on Sterling continues and the currency returns to the lower end of its recent trading range, dollar earnings for multi-nationals listed in the United Kingdom will be boosted. "Unlike Brexit, which at the time had a spillover into other markets, this is a very UK-specific thing".
British 10-year gilt yields were flat at 1.04 percent as investors bet on political uncertainty keeping Bank of England rates on hold for longer.
Yet he cautioned bears against chasing the pound much lower from here.
May's Labour rival Jeremy Corbyn, once written off by his opponents as a no-hoper, said May should step down and he wanted to form a minority government.
The probability of a clean divorce from the European Union, a so-called "hard Brexit", can play out in different ways.
Pelosi: Trump a 'bully' but Democrats willing to work with him
I'm wishing that [Mitt] Romney was president or John McCain was president". "I think his family should be concerned about his health".
The Japanese yen gave up early gains and eased to 110.20 per dollar. [.N] In commodity markets, spot gold XAU= was a whisker higher at $1,279.20 an ounce.Oil prices remained subdued with Brent having settled at its lowest since November 29, the eve of an OPEC production cut deal.US crude futures CLc1 were off 14 cents at $45.50 a barrel, with Brent crude LCOc1 down 15 cents at $47.71.
It had slipped overnight when the European Central Bank cut forecasts for inflation and said it had not discussed scaling back its massive bond-buying campaign, sending bond yields to multi-month lows.
Overnight, Wall Street had seemingly judged the testimony of former Federal Bureau of Investigation director James Comey was not life-threatening to the administration of President Donald Trump.
Comey accused President Donald Trump of firing him to try to undermine the bureau's investigation into possible collusion between his 2016 presidential campaign team and Russian Federation.
"I think the market is taking less of an alarmist review of this situation because there is no smoking gun here", said Jefferies & Co money market economist Thomas Simons. "Trump's economic agenda to go through". The three major USA indices hit fresh intra-day highs before tumbling shares of Facebook, Amazon, Apple, Microsoft and Google parent Alphabet slammed the Nasdaq and S&P 500.
In commodity markets, spot gold was 0.3 percent lower at $1,274.80 an ounce.
Oil prices remained subdued with Brent having settled at its lowest since November 29, the eve of an OPEC production cut deal.
US crude futures edged down a cent to $45.63 a barrel, with Brent crude flat at $47.86.
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