The pound has fallen to its lowest level against the US dollar for two months after remarks by Theresa May appeared to add to the likelihood of a “hard Brexit”. Sterling was down by a cent at just below $1.22 in overnight trading, its lowest level since 31 October. It was also a cent lower against the euro at just under €1.16.
[We’re] working to get the best possible deal in the trading relationship with the European Union
But currency markets appeared to interpret the remarks as making it less likely that the UK could retain access to the single market after Brexit. The pound plunged to its lowest level against the dollar since 1985 after Britain voted in June to leave the European Union. It is now about 19% lower than its level just before the referendum result became clear. The currency has been volatile since the vote as markets seize on any clues about the nature of Brexit - whether 'hard’ or soft’.