The British pound bounced back ahead of the UK general election, even though a fresh poll predicted Prime Minister Boris Johnson's ruling Conservatives would win a much smaller majority than previously forecast.
Sterling initially fell sharply before recouping losses to show a gain of 0.1% against the dollar in late exchanges.
Pre-election jitters weighed however on the British capital's FTSE 100 index of blue-chip companies, which was essentially unchanged as caution prevailed.
A key poll released late last night showed Johnson's lead over veteran socialist Jeremy Corbyn's Labour party ebbing away.
"The highly-regarded poll shows that the Conservative advantage has slipped. This is the poll that correctly predicted a hung parliament in 2017 -- and indicates that the scenario could repeat itself," said analyst Fiona Cincotta at trading firm City Index.
The YouGov opinion poll said the Tories would win tomorrow's vote, with a majority of 28 seats, sharply down from the 68 forecast in a similar study at the end of November.
Sterling has surged in recent weeks - sitting at an eight-month high against the greenback and a two-and-a-half-year peak against the euro - on expectations that Johnson would win a big enough majority to push through his Brexit deal.
However, the narrowing polls point to the possibility of another hung parliament, which would lead to more uncertainty in Westminster and drag out the Britain-EU saga even longer.
"There's a bit of a waiting mode at the moment," Oanda analyst Craig Erlam told AFP.
"There's probably too much optimism in the market right now, a bit of complacency even."
