Currency analysts are predicting a volatile period of trade for sterling as the British government races to agree a crucial Brexit deal ahead of an EU leaders' summit later this month.
The pound continued its slide Tuesday morning on news that a nearly-achieved deal had fallen through over disagreement on the question of the Irish border.
Sterling was trading at around 1.3400 against the dollar at 9:00 a.m. London time, down from a session high of 1.3523 Monday afternoon when early reports from Brussels suggested that Theresa May's U.K. government had agreed to a deal with the EU that would pave the way for future trade talks. The U.K. has to clear certain key issues before both sides can start discussing a possible trade deal.
Monday's agreement involved a U.K. concession that its province of Northern Ireland would remain in the EU customs union, preventing a hard border with the Republic of Ireland.