Sterling under pressure with uncertainty weighing on Brexit

The British currency was hit early in the trading day in London with worried investors as the country entered a crucial period for Brexit.

The British pound lost 1.27% against the US dollar, at 1.2734 dollar, reaching the lowest level in about two weeks. The currency also fell against the euro, down 0.3% to 1.126 euros.

European leaders agreed over the weekend the UK's exit conditions from the block. Theresa May, Prime Minister, now faces the daunting task of getting her projects through the British Parliament. Her own party is divided on the agreement and the Democratic Unionist Party, on which Ms. May supports to get a majority working clbad, is committed to rejecting the pact.

Investors had to deal with almost constant fluctuations in the pound as badysts evaluated the latest developments in Brexit transactions. The currency fell more than 11% from the peak of $ 1.4376 reached in mid-April.

"The tension with the upcoming vote on Brexit is palpable and amplifies the degree of vulnerability of the pound to the intraday fluctuations in risk appetite and geopolitical information around the world," said Stephen Gallo, head of the market. European foreign exchange strategy at BMO.

"The degree of positive correlation between the pound sterling and the appetite for risk is magnified."

Barclays warned earlier this week against the "asymmetric" risks weighing on the pound around the parliamentary vote on Brexit.

"A rejection of the deal by a wide margin increases the likelihood of a Brexit without agreement and is expected to result in a significant 5 to 10% decline in the pound sterling on a cumulative basis," the bank said. "On the other hand, a small margin should see the finally ratified withdrawal agreement and the pound climb up to $ 1.32 to $ 1.33."

Uncertainty about Brexit was highlighted on Monday by US President Donald Trump, who seemed to suggest that the Brexit deal would make it more difficult for the UK to enter into a trade deal with the United States.

"This seems like a good deal for the EU," Trump told reporters. "Right now, in the case, they may not be able to trade with the United States, and I do not think they want that at all. It would be a very big negative for the transaction. "