Sterling was on track for its biggest daily losses in three months today, falling over 1% to a 10-week low, after Prime Minister Theresa May said over the weekend that she was not interested in keeping "bits of membership" of the EU. 

In her first televised interview of the year, May denied that Britain would face a "binary choice" in leaving the European Union, between curbing immigration and having preferential access to the bloc's single market. 

Investors, though, took a different view, interpreting May's comments as suggesting border controls would be prioritised over market access - an outcome referred to as a hard Brexit. 

Sterling slid as much as 1.2% to $1.2136, its lowest since late October, making it the worst performer among major currencies today. 

Against the euro, sterling tumbled nearly 1.5% to an eight-week low of 86.90 pence.

The pound was unmoved by comments from a spokeswoman for the British prime minister today saying that May was ruling nothing in or out before the start of the exit talks and that she wanted the best deal for businesses to trade with the single market. 

May also used yesterday's interview to dismiss criticism from former EU ambassador Ivan Rogers that her government's thinking on Brexit was "muddled".

But she ignored growing calls from business leaders, lawmakers and the parliamentary opposition for more detail on her exit strategy. 

Currency analysts said sterling had been undermined by renewed fears of a hard Brexit, but that May's comments should not have come as a surprise to investors. 

The pound has dropped around 18% against the US dollar and 10% versus the euro since the June 23 vote as traders expect the British economy to be significantly weaker once it quits the European Union.