The British pound clawed back losses on Friday as Prime Minister Theresa May clung to her Brexit plan after the resignation of key ministers threw the divorce deal into doubt.
Sterling on Thursday suffered its worst day versus the euro since 2016 after Brexit minister Dominic Raab resigned, leaving investors panicking that Britain could soon exit the European Union without a trade agreement.
But the pound rallied nearly half a percent on Friday as May struck a defiant tone and vowed to take Britain out of the European Union in March as planned.
Sterling has see-sawed on Brexit news since the referendum. It rose when May struck a deal on Tuesday but has since fallen two and half cents to $1.2788.
Both the dollar and the yen benefited from the deepening crisis for in Britain.
The euro rose 0.2 percent to trade at $1.1356. Investors were hopeful after reports out of Italy said that Italian Prime Minister Giuseppe Conte was looking to work with the EU over his government's 2019 budget, which has been rejected by Brussels.
The dollar index, a gauge of its value versus six major peers, was down 0.1 percent at 96.81, not far off a 16-month high of 97.69 hit at the start of the week.
The safe-haven yen was well bid, changing hands at 113.28, up 0.3 percent on the day, as the Brexit turmoil drew investors toward the Japanese currency. The yen had hit a six-week low of 114.20 on Monday before reversing course.