The British pound has fallen to its lowest since 2017.
The market once again faces the prospect of a no-deal Brexit as contenders to be the next UK prime minister only increase concerns of a protracted tussle with EU leaders, leaving markets with more uncertainty and turmoil.
Nerves and worries grow for traders as a loss of momentum in the UK economy look to be morphing into a long slump, with no immediate end in sight.
Sterling was at its weakest level in comparison to the dollar in over two years, as well as hitting a six-month low against the euro.
Analysts are largely bearish on the pound after a run of poor economic data and signals from the Bank of England are that its next move may be to cut interest rates rather than raise them.
Last week, Sterling reached the bottom of a 6-month barrel at 90.10 pence per euro, while against USD it was $1.2510.
On Tuesday however, employment and wage growth data for the month of May showed that despite fears of the economic slowdown, wage growth was high and unemployment figures were healthy. Many economists expected the economy to show considerable contraction in the second quarter, but these fears failed to materialise in the figures released on Tuesday.
Investors are nonetheless nervous about the outcome of the Conservative party leadership contest, with uncertainty surrounding what the market reaction will be to either Boris Johnson or Jeremy Hunt succeeding Theresa May.
A vote by Conservative party members is expected to return a favourable result for eurosceptic Boris Johnson, who will then be expected to take up the reigns of parliament by the end of July.
Nomura FX strategist Jordan Rochester, sums up the mood of the moment in a research note, stating, “in September, hard Brexit risks will once again be priced in by markets.”