Sterling edged lower today, weighed down by European Commission President Jean-Claude Juncker telling the new British Prime Minister that a deal agreed forged by his predecessor was the best and the only Brexit agreement.
Mr Juncker told Boris Johnson yesterday that the European Union would analyse any ideas put forward by Britain, provided they were compatible with the withdrawal agreement.
Boris Johnson this week has repeated his pledge to renegotiate the withdrawal agreement and promise to take Britain out of the EU on October 31 with or without a deal.
He has also said the Northern Irish backstop must be abolished to avoid a no-deal Brexit.
Concerns that Britain under Johnson is headed for a no-deal Brexit have sent sterling plummeting, although its moves this week have been minimal after investors rushed to price in a government under the eurosceptic face of the 2016 Brexit campaign in the run-up to his taking over.
Sterling slipped 0.1% to $1.2437 today - below its weekly high of $1.2522. The pound hit a 27-month low of $1.2382 last week as fears of a no-deal Brexit jumped.
Banks say the pound could drop to as low as $1 in the event of a sudden, disorderly exit from the EU, Britain's biggest trading partner.
Against the euro, the pound was little changed at 89.53 pence.
The Bank of England gives its monetary policy decision next Thursday.
Few economists expect the bank to change rates from the current 0.75% but the focus will be on policymakers' assessment of the current economic slowdown in Britain and whether it justifies a rate cut down the line.
Money markets are pricing in a 25 basis point cut by June 2020.
