Sterling fell more than one percent against the dollar on Monday, as the greenback strengthened broadly and doubts grew over British Prime Minister Theresa May's ability to get the backing of the European Union and her own party for any Brexit deal.
On Monday, the British currency plunged to a 1-1/2 week low of $1.2841 as negative headlines over the last 48 hours punctured growing optimism last week that a deal was imminent.
May has called off a special cabinet meeting on Brexit due to take place today, the Independent website reported, amid growing signs she would not get parliamentary backing for her proposed compromise with the EU.
There are also reports that more ministers were set to quit, following the resignation last week of transport minister Jo Johnson.
Sterling's woes was compounded by a broad-based dollar rally with the greenback strengthening 0.8 percent against the euro and 0.4 percent against the Australian dollar.