>> Sterling the big loser in morning trade, skidding to three-month lows on fears over Britain's divorce from the EU. It comes a day before a speech by British Prime Minister Theresa May. Media reports says she'll set the scene for a Brexit where Britain will lose access to the bloc's single market.
Reuters' forex correspondent Jemima Kelly says that's spooking investors.>> The fact that Britain will have to then negotiate all of its trading relationships with the rest of the EU leaves just a lot of uncertainty about Britain's status in Europe, and investors hate uncertainty. And the worry is that Britain has very large twin current account and budget deficits, and we rely on foreign investment.
And if foreign investors are freaked out about the uncertainty for Britain's future in Europe, then that foreign investment will dry up, and that's what kind of drives sterling to fall.>> Currently fleeing to safer assets, including gold and the Japanese yen, investors are expected to scrutinize May's speech for clues.
>> I think in an ideal world investors would love to hear that Theresa May say that Britain's heading for a soft Brexit. Where the number one priority is given to maintaining access to the single market. She's unlikely to use the term soft Brexit, cuz she rejects the whole notion of a hard versus soft Brexit.
But I think investors would be comforted to hear her signal that that's the kind of route that we're going down.>> The big fear though, is that May could chose to prioritize immigration controls instead, which many fear could hurt the economy.