Nevertheless, sterling still recorded its sharpest daily slide since December last year against the US dollar, posting a drop of 1.5pc. It is now trading back near the levels it touched before May called a snap election on April 18.
Punhani says the odds of the pound skidding to a range of $1.20-1.25 against the US dollar over the coming weeks have "certainly increased" as investors digest the fallout of the shock election result.
"Unless a clear sense direction manages to emerge from the ashes of yesterday's vote, we remain skeptical about the ability of the pound to recover its losses."
Meanwhile, the one-month sterling-dollar risk reversal, a gauge of the balance of bets on the pound rising or falling over the next month, tumbled to a nine-month low during yesterday's trading session, before recovering to touch a one-week high. Jordan Rochester, FX strategist at Nomura, said: "Sterling volatility is the winner, as the direction over coming weeks is still very uncertain."
On equity markets, London's FTSE 100 benefited from the pound weakness, as more 60pc of companies listed on the index are foreign earners. It enjoyed its best day since late April, closing 1pc higher at 7,527.33, while the more domestically-focused FTSE 250 ended 0.1pc higher.
Tech stocks drag down US indexes
After having earlier risen to new intraday highs, US equity indexes were hit by sinking technology stocks later on Friday, with Apple, Netflix and Amazon among the big names falling.
The Nasdaq slid 1.8pc, to close at 6,207.92, and the S&P 500 technology index fell 0.08pc at 2,431.77.
The Dow earlier on Friday had hit a new all-time high, jumping by as much as 0.4pc to 21,268.91, surpassing its previous record peak, which it set yesterday, and later closed up 0.42pc at 21,271.97.
Nasdaq and Dow Jones gap widest since December
Tech sell off hits US indexes
Technology stocks sold off on Friday, wounding the Nasdaq and holding down other major Wall Street indexes, which had touched record highs earlier in the session.
The technology sector, which has soared this year and led the market's rally, dropped 3.6pc.
Apple shares fell 4.8pc and were the biggest weight on the three major indexes, after a report that upcoming iPhones launched will use modem chips with slower download speeds than some rival smartphones.
Microsoft, Facebook and Alphabet all were off more than 3pc, while chipmaker Nvidia traded down 8.8pc at $147.60 (£116) after Citron Research said the stock could trade back to $130.
Shares of software company Cloudera tumbled 16.7pc after its earnings report.
"Tech has been on a tear for a very, very long period of time," said John Praveen, managing director for Prudential International Investments Advisers in Newark, New Jersey, adding that investors may be using the earnings report as "an excuse to take some profits."
The Dow Jones Industrial Average fell 17.02 points, or 0.08pc, to 21,165.51, the S&P 500 lost 15.88 points, or 0.65pc, to 2,417.91 and the Nasdaq Composite dropped 166.89 points, or 2.64pc, to 6,154.87.
Countering tech's slide, financials rose 1.4pc and energy shares gained 2.3pc as oil prices moved higher.
Investors were also digesting major political and economic events this week in the United States and Europe.
US stocks had started the session strong after the results of the UK election, where British Prime Minister Theresa May's Conservative Party lost its parliamentary majority.
Investors also viewed former FBI Director James Comey's testimony on Thursday as not damaging enough to Donald Trump's presidency.
Market watchers were concerned result of the Congressional hearing could derail Trump's plans for lower taxes, fiscal spending and looser regulations, which have helped drive the S&P 500 up more than 13 per cent since his election.
Focus was turning to the Federal Reserve's meeting next week, when the US central bank is overwhelmingly expected to raise interest rates.
"Markets are probably expecting that the Fed will raise rates, but they will be very gradual in removing monetary accommodation," Praveen said.
