The pound sank to a 28-month low against the dollar as Boris Johnson’s government toughened its rhetoric on Brexit.
Sterling dipped 1.1% to $1.2242 and €1.1004 respectively.
The currency could fall further, according to analysis by Reuters, as traders appear to have been betting on a last-minute deal being reached.
Many business lobby groups have asked that no-deal be withdrawn as an option to keep investment flowing into the UK.
The last low for sterling was $1.2049, reached in January 2017. The record low was $1.0545 from March 1985, just before G7 powers acted to constrain a particularly strong US currency.
During a visit to Scotland, Mr Johnson said the existing withdrawal agreement negotiated with European leaders was “dead” and had “got to go”.
EU member nations have said renegotiating the deal is not an option.