The pound slipped to the lowest level against the euro in nearly nine months amid growing concern that the United Kingdom could end up leaving the European Union with no agreement for future economic ties.
Pound sterling is now selling off against the U.S. dollar and the Japanese yen, while strengthening against the Australian dollar and the euro.
Analysts said the pound was also hurt by a growing realisation, after the Bank of England's monetary policy meeting last week, that interest rate increases were likely to be as limited as one a year and contingent on a smooth Brexit.
"A lot of companies can't wait for the negotiations outcome in October, so of course are trying to hedge against a drop in the pound", said Christophe Barraud, an economist at Market Securities brokerage in Paris.
The GBP/USD is trading at the lowest level since August 31 past year as the United Kingdom cabinet said it will meet in September to prepare plans for a no-deal Brexit scenario.
The pound also fell below US$1.29 for the first time since August 31 2017.
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A lack of notable data hasn't prevented the Pound Sterling to Indian Rupee (GBP/INR) exchange rate from falling this week, as markets continue to focus on the latest Brexit developments and jitters.
The Pound Euro (GBP/EUR) exchange rate remains close to its worst levels in a year, reflecting the fact that a no-deal Brexit is seemingly a distinct possibility.
British Prime Minister Theresa May will discuss Brexit with the EU's 27 other leaders at an informal summit in Austria next month and meet with European Union leaders again in October to try to seal deals on the terms of Britain's withdrawal.
"Right now we're short of any meaningful news flow and uncertainty is high - that's not a good thing", said Jordan Rochester, an analyst at Nomura International Plc. The pound has lost more than 10 per cent since April and is down nearly 15 per cent since the Brexit vote in June 2016.
A lull in domestic data has meant that the Pound cannot gain any traction, but an assortment of data tomorrow, including quarterly GDP growth, could give Sterling a sorely-needed lift.
Bearish pressure hangs over the GBP/USD, and as FXStreet's own Valeria Bednarik noted, "the short-term picture continues favoring the downside, as the pair remained near its yearly low, while an intraday advance stalled at 1.2972, well below the 1.3000 figure".
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