The pound sterling weakens after Trump said that an agreement on Brexit could hinder trade with the United States

LONDON (Reuters) – The pound sterling weakened on Tuesday against the dollar and the euro after crossing significant levels overnight following comments by US President Donald Trump that an agreement on Brexit could adversely affect trade relations with the United States.

British Prime Minister Theresa May is facing a tough battle to convince supporters of her Conservative Party and her opposition party to pbad an agreement on Brexit through a divided parliament.

These tensions weigh on the short-term outlook for the pound.

"Trump commented on the possible trade deal with the UK after the Brexit and the uncertainty surrounding the UK's future trade deal after Brexit next year," said Sebastian Fellechner , badyst at DZ Bank.

Against the dollar, the British currency fell more than half a percent to 1.2734 dollars, its lowest level in nearly two weeks. It also fell by a third of a percent against a weak euro at 88.78 pence.

Sterling's losses were exacerbated by the fact that it broke through a key support level of about $ 1.2770, which it managed to maintain above during the last trading sessions.

Lee Hardman, a strategist at MUFG, said that it seemed less and less likely that May could get her Brexit deal signed in Parliament.

Positioning also offered little respite to the British currency after the significant reduction in short positions in recent weeks, leaving the pound more vulnerable to losses.