Sterling fell against the dollar and euro on Monday as investors worried about Theresa May's ability to stay on as British prime minister and get what they consider to be a good exit deal from the European Union.
May's blueprint for Britain's departure from the EU faces a crucial test starting on Tuesday, when lawmakers try to win concessions on the government's legislation to sever ties.
That test comes after the Sunday Times reported that 40 lawmakers from her ruling Conservative Party had agreed to sign a letter of no-confidence in her - eight short of the number needed to trigger a leadership contest.
"It seems like Theresa May continues to struggle within her own party," said Sireen Harajli, foreign exchange strategist at Mizuho in New York.
"That just highlights some of the internal weakness that the Conservative party has within its own self and I think that's going to undermine the Brexit negotiations going forward," she said.