The pound took a sharp turn south on Tuesday (9 August), as a series of economic reports showed that manufacturing output expanded less than expected in June, while Britain's total trade deficit widened beyond forecast.
Sterling fell below $1.30 against the US dollar and €1.17 versus the euro for the first time in four weeks, after data released by the Office for National Statistics showed manufacturing production fell 0.3% in June compared to the month before and against analysts' forecast for a 0.2% drop.
By mid-afternoon on Tuesday, the pound was down 0.53% against the dollar and 0.38% lower against the euro – exchanging hands at $1.2969 and €1.1706 respectively.
Meanwhile, the UK's trade in goods and services widened by £0.9bn to £5.1bn in June, compared with the downwardly revised £4.2bn figure recorded in May – and analysts' expectations for a £2.5bn reading.
The sterling came under further pressure after Bank of England policymaker Ian McCafferty warned Britain's central bank could cut interest rates further and also increase quantitative easing measures if the UK economy continues to worsen.
"The surveys point to little annual export growth in the coming months," said Ruth Gregory, UK economist at Capital Economics.
"Granted, sterling's fall since the referendum will help in time. But any improvement will probably be slow against a background of fairly sluggish global growth and uncertainty about future trade relationships between the UK and other countries."
Elsewhere, the euro slid 0.13% against the dollar and was trading at $1.1075, but the greenback itself fell, dropping 0.27% against the yen to ¥102.17.
Despite the decline against the yen, some analysts expect the dollar to continue to perform well in the short-term future, as investors show confidence in the Federal Reserve's policy.
"Whether or not the Federal Reserve moves on rates in September is hardly the point at this stage, the dollar is merely benefiting from the perception that the US central bank is one of the only central banks at this point in time that won't be easing monetary policy for the foreseeable future," said Michael Hewson, chief market analysts at CMC Markets.