Sterling fell below $1.23 on Tuesday, trading down 0.6 per cent on the day, as it continued to suffer from concerns about the economic fallout of Britain’s planned exit from the EU.

Trade-weighted sterling hit a nearly-eight-year low of 74.0 at the Bank of England’s first morning print of the index, which measures the pound’s broader strength. It was also 0.5% weaker at 90.51 pence per euro .

Some traders cited a Financial Times report that Russian bank VTB may move its European hub to Frankfurt, Paris or Vienna as having added to worries of financial sector cutbacks in London due to Brexit.

"There is nothing to go on the data front today, but concerns surrounding our ever-increasing current account deficit have reignited discussion around the widespread impact such a hole can create," said Tobias Davis, head of corporate treasury sales at Western Union in London.

“Liquidity is also a cause for concern as present, highlighted by gaps in price action.” – Reuters