LONDON: The pound came under renewed pressure Monday after polls put the British referendum vote back on a knife-edge, but the London stock market rallied to outperform its eurozone rivals.
Britain's currency dropped to around three-week lows against the euro and dollar, before rebounding.
The euro hit 79.05 pence in Asian trading hours -- the European single currency's highest level against sterling since mid-May.
And the pound slid to $1.4353 -- a three-week low point.
"The polls are having a significant impact on the pound," said Craig Erlam, senior market analyst at Oanda trading group.
Traders on Monday were reacting to a series of polls, one of which showed Brexit backers moving into a lead in the polls for the first time in weeks, raising pressure on Prime Minister David Cameron ahead of Britain's June 23 EU referendum.
Financial markets have proved volatile ahead of the vote that could see Britain becoming the first country to drop out of the EU and have proved particularly so as the campaign has heated up.
Elsewhere on currency markets Monday, the dollar clawed back some of its hefty losses after last week's soft US jobs report reduced the chances of an imminent interest rate rise from the Federal Reserve.
A strong yen meanwhile continued to hit Japanese exporters -- resulting in Tokyo's Nikkei stocks index ending the day down.
In Europe, London's benchmark FTSE 100 index outpaced rival Frankfurt and Paris markets, jumping by 1.0 percent for the day.
"Commodity stocks are continuing to benefit from Friday's sharp drop in the US dollar, which along with noises from the US about China reducing its excess steel capacity as part of a bilateral trade agreement, is supporting a rise in metals prices," said CMC Markets analyst Jasper Lawler.
Shares in miner Anglo American were the biggest gainer on the FTSE 100, jumping 11.1 percent. Commodities trading giant Glencore shot up 6.9 percent, and Rio Tinto 6.4 percent.
- Weak German exports -
Frankfurt's gains were capped as official data showed that weakness in China and Germany's other export partners had prompted the biggest drop in industrial orders for Europe's top economy in more than a decade.
The drop of two percent in comparison with March was far worse than the 0.7-percent decline forecasted by analysts polled by financial services provider Factset.
US stocks pushed higher, also benefitting from a weaker dollar pushing up oil prices, with the Dow adding just over half a percent approaching midday.
"US equities are moving higher in early action, with a rise in crude oil prices supporting the energy sector, while traders are awaiting today's afternoon speech from Federal Reserve Chairwoman Janet Yellen, in the wake of Friday's sharp miss in May domestic nonfarm payroll growth," said analysts at Charles Schwab brokerage.
The US Labor Department said on Friday that May saw the world's top economy create the fewest number of jobs in six years, slashing expectations borrowing costs will rise any time soon.
Traders who had been expecting the Fed to announce a rise no later than July -- with the central bank having hinted at such just last month -- were caught off guard.
The dollar was sent plunging two percent against both the yen and the euro on Friday.
"The slowdown in job growth in recent months must have put paid to any chance of a hike in interest rates by the Fed at its mid-June meeting," said Richard Jerram, chief economist at Bank of Singapore.
London - FTSE 100: UP 1.0 percent at 6,273.40 points (close)
Frankfurt - DAX 30: UP 0.2 percent at 10,121.08 (close)
Paris - CAC 40: UP 0.04 percent at 4,423.38 (close)
EURO STOXX 50: UP 0.3 percent at 3,007.16
New York - Dow: UP 0.6 percent at 17,917.05
New York - S&P 500: UP 0.5 percent at 2,109.20
New York - Nasdaq: UP 0.4 percent at 4,964.02
Tokyo - Nikkei 225: DOWN 0.4 percent at 16,580.03 (close)
Shanghai - Composite: DOWN 0.2 percent at 2,934.10 (close)
Hong Kong - Hang Seng: UP 0.4 percent at 21,030.22 (close)
Euro/dollar: DOWN at 1.1361 from 1.1364 late Friday
Dollar/yen: UP at 107.25 yen from 106.63 yen
Pound/dollar: DOWN at $1.4463 from $1.4515
Euro/pound: UP at 78.86 pence from 78.28 pence
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