Sterling could continue to see weakness and may plunge further as uncertainty around Brexit and monetary policy easing from the Bank of England (BOE) drives investor sentiment across the U.K.
The currency has seen a lot of volatility in the last two months ever since the U.K. voted to leave the European Union. While the initial moves were dramatic, plunging from the highs of $1.50 to a 31-year low of $1.32, the currency continues to remain under pressure at current levels of $1.29. The currency is down nearly 12 percent since the start of the year.
"We continue to see sterling weakening as we move towards the end of the year," David Stubbs, global market strategist at JP Morgan Asset Management, told CNBC via email.
"As hard evidence of the economic slowdown continues to build, monetary policy is eased further and investment flows into the U.K. are dampened by uncertainty over the policy future, sterling is expected to slip towards 1.25 against the U.S. dollar," he added.