Pound sterling rose further on Friday after Brussels gave Britain a Brexit deadline extension, but stocks dived as fresh economic gloom gripped trading floors.
European equities tanked and the euro sank under $1.13 as poor eurozone manufacturing data rekindled fears over the state of the world economy, dealers said.
The pound however pushed higher one day after European Union leaders agreed at a crucial summit to delay Brexit following a request from Prime Minister Theresa May.
The premier was given until April 12 to push her divorce agreement through a fractious parliament next week. If she manages to get it passed, the exit date will be pushed back until May 22.
A third defeat by MPs would mean Britain crashes out on April 12, unless London agrees to take part in European elections.
Prior to the offer, Britain had been due to crash out from the bloc next Friday.
"Sterling remains very volatile as EU leaders have moved to stop a chaotic no-deal Brexit from happening next week by handing Theresa May an extra fortnight," said Oanda analyst Craig Popplewell.
"The UK must decide by April 12 what it will do next," he added. However, the stronger pound weighed on London´s FTSE 100 index, which has a large number of multinationals whose earnings are reported in dollars.