THE pound endured a rollercoaster ride after the release of the minutes of the latest Bank of England rate-setters' meeting saw sterling briefly touch 1.70 against the US dollar.
It received a boost after the release appeared to offer another signal that interest rates may rise this year - but sunk back towards 1.69 as traders concluded the details of the discussion gave a less hawkish picture than had been expected.
The currency focus came during a quiet period for global stock markets, with the FTSE 100 Index closing 11.8 points higher at 6778.6.
Attention turned to the latest meeting of the US Federal Reserve when the central bank was due to update its economic forecasts and expected to reveal the latest scaling-back in its quantitative easing programme.
European markets were mixed with Germany's Dax up slightly and France's Cac 40 declining. In New York, the Dow Jones Industrial Average was in the red ahead of the Fed's latest move.
On currency markets, the pound was lifted after it was revealed the Bank of England's Monetary Policy Committee thought the City was too optimistic about the length of time rates would stay at their record low of 0.5 per cent.
But the minutes also revealed that none of the committee's nine members voted for a hike this month, as some had speculated. It left sterling down against the single currency, as well as the greenback, to just under 1.25 euros.
In London, energy stocks were in focus as oil prices rose in the wake of more violence in Iraq, where Islamic militants attacked the country's largest refinery.
Benchmark crude rose to nearly 107 US dollars a barrel in New York while Brent crude was at 114.05 US dollars. Royal Dutch Shell rose 44p to 2533p while BP climbed 8.3p to 514.4p.
Elsewhere, Mr Kipling and Ambrosia owner Premier Foods Premier Foods was nearly 10 per cent lower, off 5.5p to 52p, after it said "subdued" grocery markets meant it no longer expects its leading brands to grow by up to three per cent this year, although cost cuts kept profits on course to meet hopes.
Property website Zoopla made a decent start to trading on its stock market debut after its shares were priced towards the lower end of expectations.
The group, which owns websites including PrimeLocation and SmartNewHomes, priced shares in the float at 220p, compared with previous guidance of between 200p and 250p.
The stock climbed to as high as 236p in conditional dealings, giving the firm a market capitalisation of £985 million, before settling at 230p.
The biggest FTSE 100 risers were Shire up 125p at 3785p, Associated British Foods up 60p at 3050p and Royal Dutch Shell up 44p at 2533p. The biggest fallers were United Utilities down 24.5p to 861.5p, IMI down 38p to 1526p and Severn Trent down 41p to 1928p.