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Early GBP/USD weakness reflects broader USD buying over Japanese and French political developments.
In France, Sebastien Lecornu tendered his resignation on Monday after it became blazingly clear the government he was to head wouldn't get out of the gates.
He had announced a new cabinet on Sunday night, and the resounding political response made it clear it would not command the numbers in the National Assembly required to render it functional. This is because the new cabinet of ministers was very similar to the previous lot.
With the euro falling in response to heightened French political risk, it's the dollar that is being sought for its traditional safe-haven characteristics.
The Yen is another laggard as Sanae Takaichi's surprise win in the LDP leadership contest
"The initial market reaction reflects expectations that Sanae Takaichi will actively pursue looser fiscal and monetary policies to support economic growth in Japan," says Lee Hardman, FX analyst at MUFG Bank Ltd. "The Japanese rate market has responded accordingly to pare back expectations for further BoJ rate hikes at the short-end of the curve."
The Dollar-Yen surges through 150, and with it lifts all other USD-paired boats in the harbour and it's little wonder therefore that GBP/USD is under pressure.
For GBP/USD to recover, we would need to see an initial break above the 21-day moving average at 1.3475, which would then take us back towards 1.37.
However, at present, odds favour the downside case and an extension lower to the September 25 low at 1.3323 now comes into play.
Risks to the U.S. Dollar remain however, with the U.S. government shutdown set to continue after signs that Democratic and Republican leaders are still "far apart" on how to end the impasse ahead of another vote on getting a spending bill through the Senate later on Monday.
In separate Sunday interviews with NBC's Meet the Press, the House's top Democrat Hakeem Jeffries and its Republican leader Mike Johnson each blamed the other's party for the continued stand-off, which will head to its fifth day on Monday.
A bill to fund the government has passed the House, but has repeatedly failed in the Senate.
The dollar has proven robust in the initial days of the shutdown, but analysts we follow warn that an extended spell would start to hit the economy and employment.
The longer it lasts, the more troubling it becomes for the dollar. Given this, GBP/USD weakness might yet prove to be shallow.
The pound is meanwhile likely to remain an underperformer in G10 FX over the coming weeks over concerns about the country's high inflation levels and the looming budget.
The budget forecasting process began last week, with the Office for Budget Responsibility (OBR) giving the government an initial 'pre-measures forecast, one of a number of iterations ahead of the day itself.
OBR downgrades to productivity forecasts, increased social spending and higher debt costs mean the Chancellor will need to raise taxes, raising uncertainty for businesses and households.
For financial markets, the impact this uncertainty has on data will be important. Also, the market will be nervous about whether or not the government passes the credibility test when addressing the UK's difficult fiscal path.
"Sterling markets will be sensitive to any leaks on its contents," says a note from Lloyds Bank.
The new week commences with a timely article in Bloomberg that points to rising gold and bitcoin prices, which come at the expense of some currencies. It describes the phenomenon as the "debasement trade".
Investors are worried about inflation and lax fiscal policies, which ultimately debase traditional currencies.
The pound is a prime example of a currency at risk of debasement: the government has the spending taps turned fully on, ensuring UK inflation is the highest in the G7, and rising. And despite this, the Bank of England continues to insist it must go further with interest rate cuts.
In short, British authorities are doing nothing to protect the currency from debasement, something that will surely have an impact on the pound's long-term trajectory.