Sterling fell in early London trading on Monday as investors grow increasingly concerned that Britain and the European Union were no closer to agreeing a Brexit withdrawal deal.
Sterling traded 0.2% lower at $1.2311. It was down 0.2% against the euro at 89.195 pence.
ING analysts attach a 10% to 15% chance a new deal would be reached over the next week.
A series of disappointing economic data over the past week has added to worries about the British economy and the impact of Brexit-related political uncertainty.