European markets closed lower after a "lacklustre" trading session which saw them weighed down by strong local currencies.

The Asian markets had slumped in the early hours after the prime minister of Japan, Shinzo Abe, said he was stepping down from the post, to the shock of Japanese traders, but the news had a smaller impact in Europe.

The FTSE 100 closed 36.42 points lower at 5,963.57 at the end of trading on Friday.

David Madden, market analyst at CMC Markets UK, said: "Trading in Europe has been lacklustre and the major indices are to finish in the red.

"This morning there was some excitement as Shinzo Abe announced he was stepping down for health reasons.

"The surprise announcement made a lot of headlines, but it didn't have a huge impact on stocks in Europe.

"Things have been a little directionless today, partially because there has been a lack of local news, but it is likely that UK-based traders are winding down ahead of the long weekend."

Sterling was a major drag on London-based multinationals throughout the day, as the pound strolled to its highest figure against the dollar since December 2019.

The pound rose 1.1% versus the US dollar at 1.334 and was up 0.42% against the euro at 1.121.

Europe's major markets also dropped against a strong euro, while the French Cac dipped after a final reading of French GDP for the second quarter of minus 13.8%.

The German Dax decreased by 0.48%, while the French Cac moved 0.26% lower.

Across the Atlantic, the Dow Jones moved fractionally higher after stronger-than-expected personal spending data for July helped to drive some optimism among traders.

In company news, guarantor lender Amigo saw shares jump after its founder and chief said he would buy 29% of the company's stock at 20p per share if he was reappointed as chief executive.

James Benamor, who has been selling off shares in the business in recent weeks following a bitter boardroom battle, also withdrew a demand for a shareholder vote that could remove newly reappointed chief executive Glen Crawford from the board.

Shares in the company increased by 1.9p to 13.9p at the close of play on Friday.

Online fashion giant Boohoo tumbled again after The Guardian reported that it has been selling clothes made by at least 18 factories in Leicester that audits say have failed to prove they pay the minimum wage to workers.

Shares closed 29.8p lower at 289.5p after the newspaper said auditors had raised "critical" issues with Boohoo suppliers before the company faced a raft of allegations over factory conditions last month.

Greggs shares went stale after the high street bakery chain confirmed its Leeds distribution site has been closed for a deep clean after an undisclosed number of staff tested positive for Covid-19. It closed 23p lower at 1,417p.

The price of oil improved as workers were removed from the Gulf of Mexico rigs, amid concerns over adverse weather.

The price of a barrel of Brent crude oil increased by 1.37% to 45.83 US dollars.

The biggest risers on the FTSE 100 were Polymetal, up 88p at 2,028p, Whitbread, up 72p at 2,529p, Fresnillo, up 35p at 1,262.5p, and Standard Chartered, up 8p at 392.4p.

The biggest fallers of the day were Rolls-Royce, down 8.9p at 241.1p, Melrose, down 3.7p at 101.8p, DS Smith, down 8.2p at 258.7p, and Smurfit Kappa, down 80p at 2,674p.