Currency traders are aggressively pricing in a no-deal Brexit scenario after remarks over the weekend from the U.K.'s new government, headed by Prime Minister Boris Johnson, and are selling the pound as a result.
What's happening: Michael Gove, who is in charge of planning for a possible no-deal exit from the EU, has said the British government is "working on the assumption" that it will leave without a deal.
- The pound on Monday dropped 1.3%, and fell further Tuesday morning, touching its lowest level against the dollar in close to 3 years.
What they're saying: "The new UK government wants to show its determination to leave the EU without a deal in less than 100 days to bolster its negotiating position," Marc Chandler, chief market strategist at Bannockburn Global Forex, said in a note to clients.
- "It does not appear to be scaring European officials but is scaring investors who are leaving sterling."
Go deeper: Boris Johnson begins by blowing up Theresa May’s Cabinet