In early deals in London, the pound fell 0.5 percent to $1.2968, its lowest since July 12. The euro was up 0.4 percent at 85.35 pence, also its highest in a month.
Speculators have been selling the pound in the run up to last week's Bank of England meeting where policymakers lowered rates to record lows and announced a quantitative easing programme to cushion the impact on the economy from Britain's shock vote to leave the European Union.
Data from the Commodity Futures Trading Commission released on Friday showed speculators' bets against the pound were at a record high just before the BoE meeting last week..
Traders said focus will be on British industrial data and trade deficit for June to be released at 0830 GMT. Forecasts are for industrial production to show a 0.1 percent rise from a month earlier, while the trade deficit is expected to widen.
Still, some analysts are cautious given the poor run of data since the Brexit referendum.