The pound sank to an 11-month low on Monday as comments by officials about Brexit stoked fears among investors that Britain could soon crash out of the European Union without securing a trade agreement.
With less than eight months until Britain quits the EU, the government has yet to agree a divorce deal with Brussels.
The saga over Brexit has come to dictate the pound’s fortunes as fears mount about the impact it would have on Britain’s trade.
Investors are growing edgy about the currency’s outlook despite signs the economy is improving and the Bank of England raising of interest rates last week for only the second time in over a decade.
Sterling on Monday fell to $1.2920, its lowest since July 19, before settling down half a percent on the day. It slumped 0.4 percent against the euro to 89.33 pence and was the biggest loser among major currencies against a broadly strong greenback.