By mid-afternoon London time, the pound was down 0.6 percent on the day at a nine-month low of $1.5168, having earlier briefly topped $1.53 in the wake of revised figures showing the economy grew by 0.3 percent in the fourth quarter, better than the 0.1 percent initially thought.
The dollar fell against major currencies as traders sold the greenback to cover extreme euro short positions as worries over Europe's debt crisis eased, a day after the euro fell to a one-year low against the yen.
The euro hit a session high after Bloomberg reported that Germany may buy Greek bonds through lender KfW Group. Reuters had reported on Feb. 11 that Germany was considering using KFW to buy Greek debt.
Greece has been at the center of the euro's struggles the last few months, with its fiscal debt this year estimated at more than 120 percent of gross domestic product, the highest of any euro zone member.
In mid-day trading Friday, the euro was up 0.45 percent at $1.3616 from a previous session close of $1.3555. Against the Japanese yen, the dollar was down 0.25 percent at 88.85 from a previous session close of 89.070.
World stocks measured in the MSCI All-Country World Index was up 0.75 percent.
Meanwhile, the Dow Jones Industrial Average was down 5.74 points, or 0.06 percent, at 10,315.29. The Standard & Poor's 500 Index was down 0.68 points, or 0.06 percent, at 1,102.26. The Nasdaq Composite Index was down 2.46 points, or 0.11 percent, at 2,231.76.
The pan-European FTSEurofirst 300 index of top shares closed up 1.1 percent at 1,007.51 points.
European bank and commodity stocks led the share price gains as metal and oil prices rose.
The benchmark 10-year US Treasury note was up 7/32, with the yield at 3.6061 percent. The 2-year US Treasury note was up /32, with the yield at 0.8157 percent. The 30-year US Treasury bond was up 20/32, with the yield at 4.5414 percent.
