Steven Barrow, strategist at South Africa’s Standard Bank, thinks the pound is falling because time is running out to agree a Brexit deal.

He warns (via the FT) that the selloff could intensify this autumn.

“We think the timescale is unrealistic and, as this starts to dawn on the market, it could just prove another factor tipping risk assets over the edge in the autumn.

Sterling caught a dose of the “Brexit blues” today, says Connor Campbell of financial spread-betting group SpreadEx.

He blames Dr Fox’s warning that a no-deal Brexit was a 60:40 shout, on top of Bank of England governor Mark Carney’s concerns.

Campbell says:

Though the Western markets were almost uniformly in the red, the day’s real loser was the pound.

Plunging half a percent against the dollar – cable is at a fresh 11 month low – and 0.3% against the euro, sterling was spooked by the apparent increase in likelihood of a ‘no-deal’ Brexit, with international trade secretary Liam Fox echoing Mark Carney’s claims last week that the chances of the UK leaving the EU without an agreement in place is becoming more and more of a reality.

Brexit worries have also pulled the pound down against the euro today.

Sterling has dropped below €1.12 today, a decline of 0.35%. Back in April it was worth almost €1.16, meaning UK holidaymakers got a little bit more for their money overseas.

Polling company ORB has bad news for the government: public support for Theresa May’s handling of the Brexit negotiations has hit a record low.

Just 24% of the public approve of the way things are going, they say, things are going well, down from 40% back in April.

European stock markets have slipped into the red today.

Investors are worrying about the decline in German factory orders in June and the lack of Brexit progress, meaning the FTSE 100 didn’t get its typical boost from the weakening pound.

Mihir Kapadia, CEO of Sun Global Investments, says:

“European stock markets opened mixed today as the trade dispute between the US and China continues to hang over investors and stocks...

There has been an marked escalation in the trade war, with President Trump’s claiming the US was winning the trade dispute.”

The drop in the pound has been the main event on a quiet session, says Boris Schlossberg, managing director of FX Strategy BK Asset Management.

He writes:

“The biggest story of the day was the continued slide in cable which hit fresh 11 month highs as it dipped below towards $1.2950 support on renewed fears of a hard Brexit.”

Schlossberg also warned that the “waves of uncertainty” buffeting sterling will become choppier as the Brexit deadline approaches.

Marketwatch has more details.

The latest attacks on Europe from eurosceptic voices such as Liam Fox are pushing the pound down, argues Commerzbank currency strategist Ulrich Leuchtmann.

Leuchtmann says:

“The voices forecasting a hard Brexit are becoming increasingly shrill. The FX [foreign exchange] market is slowly beginning to work out that these people might successfully torpedo a constructive solution.”

The pound is continuing to drop, and is now down three-quarters of a cent at $1.293.

Over in Downing Street, the prime minister’s spokesman has denied that Britain is likely to leave the EU without a deal.

He told reporters at the regular lobby briefing that:

“We continue to believe that a deal is the most likely outcome because reaching a good deal is not only in the interests of the UK, it is in the interests of the EU and its 27 members.”

But, he also argued that Liam Fox was right to warn that a ‘no-deal’ Brexit is an option (spooking the pound to an 11-month low)

Why a no-deal Brexit worries the City:

The pound is hitting new 11-month lows, due to Brexit worries and a general move into the US dollar this morning.

UBS Wealth Management has cut its recommendation for clients to go ‘overweight’ on shares, due to the threat of a trade war.

It fears that the dispute will get worse in the months ahead, with “several painful rounds of talks and new tariff measures” on the horizon.

Caroline Simmons, deputy head of UBS Wealth Management’s UK Investment Office, warns that trade war spats could rumble along for Donald Trump’s entire presidency:

“While we expect the trade disputes to ultimately be resolved before the world is tipped into another recession, our base case now assumes things will get worse before they get better.

“The benign macroeconomic environment, and strong fundamentals, have emboldened a recent sense of market optimism. But there is a very real danger of overlooking the possibility of the trade situation getting worse, which could have significant impacts, such as supply-chain disruptions, reduced hiring, and lower investment.

“To reflect this risk and take advantage of the recent move higher in equities, we are reducing our overweight in global equities versus high grade bonds.”

The drop in German factory orders may indicate that the country’s growth rate is slowing fast, warns Mikael Sarwe of Nordea Markets:

Back in the UK, car sales have crept up in July, despite a drop in demand for diesel cars again.

Some 163,898 new cars were registered last month, up 1.2% year-on-year, the Society of Motor Manufacturers and Traders reports.

Diesel registrations slumped by nearly 25% compared with July 2017, as the knock-on effect of the emissions scandal lingers.

Petrol car sales jumped by 20%, while electric car sales jumped 21% - giving them 6.5% of the market.

Ian Plummer, director at Auto Trader, reckons car buyers got some good deals last month:

“Manufacturers have been racing to clear stock before new regulations on fuel economy and emissions take effect in September, resulting in some great opportunities for consumers.”

Reuters reports that the Chinese media turned up the heat on Donald Trump over his trade policies:

The overseas edition of the ruling Communist Party’s People’s Daily newspaper singled out U.S. President Donald Trump in an editorial on Monday, saying he was starring in his own “street fighter-style deceitful drama of extortion and intimidation”.

The drop in German factory orders was much steeper than expected, says Bloomberg:

Orders fell 4 percent from the previous month -- eight times as much as forecast in a Bloomberg survey of economists -- and the 0.8 percent drop from a year ago was the first annual decline since July 2016.

The size and scale of the drop in German factory orders in June is almost too bad to be true, suggests Marc Ostwald of ADM Investor Services.

He writes:

The fact that every single category fell - be that domestic, Eurozone & Non-Eurozone or Capital Goods, Consumer Durables or Intermediate Goods - looks to be highly anomalous, in so far as there is rarely ever a month where there is a “parallel shift” down, barring events such as the global financial crisis of 2008.

As such, he expects a sharp bounceback in July. Alternatively, today’s data might be revised up.

Economist Fred Ducrozet of Pictet Bank points out that ‘core’ German factory orders also fell in June:

The broader picture is that German factory orders have fallen in five of the first six months of 2018, as this chart from the Financial Times show:

The FT’s Camilla Hodgson writes that trade tensions are a factor:

The data covers a month when the transatlantic trade relations between the US and the European Union were worsening, ahead of a meeting between US President Donald Trump and European Commission President Jean-Claude Juncker in July.

Carsten Brzeski of Dutch bank ING also believes Germany is being buffeted by rising trade tensions.

Here’s his take on today’s data:

German industrial orders took a severe hit in June, dropping by 4% month-on-month, from [up] 2.6% month-on-month in May. On the year, new orders were down by 0.8%.

Even though new orders data are highly volatile, the June report could be a tentative sign of how trade tensions are hitting the German economy. Foreign orders from outside the eurozone dropped by almost 6% MoM.

At the same time, domestic orders decreased by 2.8% MoM. With the sharpest drop since January 2017, today’s new orders data do not bode well for German industry going into the second half of the year.

Oliver Rakau of Oxford Economics says today’s German factory data is “horrendous”, and a sign that economic uncertainty is dampening demand.