Sterling came under pressure on Friday following comments by Donald Trump that a post-Brexit trade deal between Britain and the US could be dead.
Stock markets bounced back from doldrums as bargain-hunting investors snapped up cheap shares that were knocked by trade war fears a day earlier.
The pound staged a minor recovery on Tuesday after taking a bruising on the back of two ministerial resignations a day earlier which threw Theresa May’s premiership into doubt.
The pound tumbled on Monday amid political jitters as the resignations of Foreign Secretary Boris Johnson and Brexit Secretary David Davis raised questions over Theresa May’s future as Prime Minister.
The pound spiked against the US dollar as investors cheered an upward revision to UK growth in the first quarter.
Global stocks started to recover after Donald Trump’s administration pulled back from plans to restrict Chinese investment in US tech companies.
The FTSE 100 staged a mini rebound on Tuesday but trade tensions triggered by US President Donald Trump continued to grip investors.
Trade war fears have sparked a global equity sell-off and wiped nearly £45 billion off the FTSE 100, which suffered its worst one-day decline in over a year.
More than £34 billion has been wiped off the FTSE 100 after stocks suffered a double whammy of trade war fears and worries that next week’s Opec meeting could lead to another global oil glut.
The FTSE 100 leapt to a three-week high on Thursday, with Rolls-Royce helping drive the index north after announcing a sweeping restructuring plan aimed at saving £400 million per year.