- When asked about the agreement between Westminster and the EU's other 27 heads of state on Monday, Trump replied: "Sounds like a great deal for the EU."
- His comments come at a time when British Prime Minister Theresa May is urgently looking to rally enough lawmakers to back her proposed Brexit deal in order to get it through Parliament in two weeks' time.
- Sterling fell more than 0.5 percent against the U.S. dollar and around 0.3 percent against the euro on the news.
President Donald Trump on Monday warned that the agreement allowing Britain to leave the European Union could endanger a future U.S.-U.K. trade deal.
His comments come at a time when British Prime Minister Theresa May is urgently looking to rally enough lawmakers to back her proposed Brexit deal in order to get it through Parliament in two weeks' time. A daunting task given the broad criticism it has received.
Nonetheless, May has repeatedly insisted the terms in which the U.K. is set to leave the bloc at the end of March next year delivers for all of the British people.
When asked about the agreement between Westminster and the EU's other 27 heads of state on Monday, Trump replied: "Sounds like a great deal for the EU."
"I think we have to take a look seriously whether or not the U.K. is allowed to trade because right now if you look at the deal, they may not be able to trade with us," Trump told reporters outside the White House.
"And that wouldn't be a good thing. I don't think they meant that," he added.
In response, Downing Street said it is "very clear" Britain will be in a position to sign trade deals with countries around the world post-Brexit.
The U.S. president seemed to suggest the current deal could potentially leave Britain unable to negotiate a free-trade agreement with the world's largest economy post-Brexit. Trump did not specify which provision of the deal he was worried about.
The comments prompted sterling to fall against both the U.S. dollar and the euro Tuesday morning. Against the greenback, the U.K. currency slipped more than 0.5 percent to $1.2734, falling its lowest level in almost two weeks.
It also slumped around 0.3 percent against a relatively weak euro to 88.65 pence.
Under the deal secured with EU leaders on Sunday, Britain will divorce the bloc with continued close trade ties. But a deeply divided British parliament means May is left facing an uphill battle to get the deal approved on December 11.
In response to Trump, a U.K. government spokesperson told CNBC Tuesday: "The political declaration we have agreed with the EU is very clear. We will have an independent trade policy so that the U.K. can sign trade deals with countries around the world — including with the U.S."
"We have already been laying the groundwork for an ambitious agreement with the U.S. through our joint working groups, which have met five times so far. The U.S. Trade Representative also issued a call for views from the public on a future U.K.-U.S. free trade agreement earlier this month," they added.