Sterling dropped more than 0.6 per cent against the US dollar to trade at $1.214, marking its lowest level since mid-January.
The currency was also hovering near eight-week lows versus the euro, down 0.5 per cent to trade at €1.140.
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The pound was suffering in part from delayed investor reaction to yesterday’s news, when First Minister outlined plans to launch a second independence referendum, and Downing Street signalled the Prime Minister would trigger Article 50 at the end of March.
Connor Campbell, a financial analyst at SpreadEx, said: “It appears that there are a few things in play here. The pound could be belatedly reacting to Nicola Sturgeon’s announcement of a second Scottish independence referendum, something that it basically ignored on Monday.
“Then there is the news that Article 50 will be triggered at the end of March – hardly an unforeseen problem, but one that carries a sting in its tail nonetheless.”
Theresa May was widely expected to trigger the start of Brexit negotiations this week, but plans to do so at the end of the month will allow the Dutch elections and the EU’s 60th anniversary to take place without being overshadowed by Article 50.
The exchange rate was also impacted by a stronger US dollar, which was on the rise in anticipation of an interest rate hike by the Federal Reserve tomorrow. That would mark the third interest rate rise by the US central bank since the financial crisis.