The pound has fallen to a two-year low against the dollar reflecting traders increasing concerns about recession around the world as energy prices continue to soar.
But sterling is also weak as markets worry about future UK economic growth, analysts said.
Sterling could fall even further after predictions of economic stagnation and as inflation soars, they added.
London stock markets also fell on Tuesday on worries about UK growth.
But the resignation of two senior government ministers on Tuesday evening was not a significant factor in the pounds fall, Jane Foley from Rabobank told the BBC Radio 4 Today programme.