The British pound has started the year on a rough note after it slumped to a 10-week low against the dollar on Monday after the British Prime Minister suggested the U.K. may be on track to leave the European single market.
Prime Minister Theresa May's comments over the weekend sent the pound below $1.22 on Monday and continues to remain under pressure as it trades around $1.21.
"From here we expect more of the same for the pound and push cable below 1.20 and EUR/GBP above 0.88", Jordan Rochester, global fx strategist at Nomura, said in his morning note.
He further added that "in the short term EUR/GBP could have more juice in the short GBP trade and overshoot further than GBP/USD. Given the USD bulls are currently on strike until the risk event of Trump's press conference on tomorrow (Wednesday) is out of the way."