Sterling has clawed back some ground against the dollar - but not much.
It is now down 1.33% at $1.2817.
It has been a very rocky few hours for the British currency. Here's a timeline showing how it has risen and fallen since the Cabinet meeting began on Wednesday afternoon...
Pound on course for biggest one-day fall in 2018
Harvey, market analyst at Monex Europe, says sterling's fall against the dollar is the biggest drop this year "and further losses would see sterling test July 2016’s 2% drop from open to
The day is far from over, and rumbles from Westminster suggest that the PM may not see out the Christmas period, but for now, the pound will have to wait for further resignations or rebellion from within the Tory party to decline further towards the $1.25 level. It’s also worth noting that as distant as the prospect seems now, today’s sterling move could set a base for an explosive rally before the year is out should May manage to hold on and get her deal through parliament."
Scramble for the exit?
The pound is now down 1.5% against the dollar at $1.2795 and down 1.39% against the euro at €1.1331 following this morning's ministerial resignations.
Nomura analysts Jordan Rochester and Andy Chaytor, said: "What concerns us is how many ministers seeing this news
will be pondering if it is better to get their resignations in
now rather than wait.
"If several ministers go this becomes more difficult for
Theresa May to hold her position."
Sterling gains ground
The pound has gained a little ground against the dollar - up 0.22% at $1.3018 - and trimmed its drop against the euro to €1.1484.
However, Ray Attrill, head of currency strategy at National Australia Bank, says: "Getting the draft [EU withdrawal deal] approved by the parliament will be
extremely challenging and that's why we are seeing sterling
gains capped at 1.30".
Sterling is still above $1.30 - up 0.15% at $1.3010 - but is down 0.10% against the euro at €1.1480.
Prime Minister Theresa May will be making a statement in the House of Commons later this morning - Business Live will be keeping an eye on whether that affects the UK currency.
Pound dips ahead of Brexit meeting
The pound is now down on the dollar ahead of a crucial meeting between Theresa May and the Cabinet where the Prime Minister will attempt to win backing for a draft EU withdrawal deal agreed last night.
Sterling is now down 0.12% against the dollar at $1.2955.
However, it is up 0.10% against the euro at €1.1496.
Sterling edges ahead on draft Brexit deal
Sterling made a tentative rise against the dollar on Wednesday morning after UK and EU officials agreed a draft Brexit agreement.
The pound is 0.12% up against the greenback at $1.2986 and is up 0.16% against the euro at €1.1503.
Prime Minister Theresa May now has to get backing from ministers for the deal. They will gather at Downing Street this afternoon at 2.00pm.
Michael McCarthy, chief market strategist at CMC markets, says: "The bullish sentiment has certainly returned for the pound,
but we need to see the finer details of the draft deal and May
needs support from her ministers."
Cautious optimism lifts sterling
The pound has staged a small recovery against the dollar - up 0.40% to $1.2902 - however, it is not enough to make up for Monday's drop after investors took fright about uncertainty over a Brexit deal.
Reports suggest that late night talks in Brussels ended with "optimism on both sides", although no final Brexit deal has been agreed.
Sterling is up 0.17% against the euro at €1.1475.
It's a volatile day for the pound, which has now come off its lows.
The market is said to be reacting to a report in the Financial Times saying the EU's Brexit negotiator, Michel Barnier, had reportedly told ministers from the EU’s remaining 27 member states that the main elements of a Brexit text are ready.
Sceptical market sends pound lower
Sterling is now trading down 0.93% against the dollar at $1.2854.
The pound is also 0.20% lower against the euro at €1.1423.
Reports suggest that Prime Minister Theresa May may not get Cabinet backing for a draft Brexit withdrawal deal this week and is struggling to reach an agreement with Brussels.
Marc Chandler, chief market
strategist at Bannockburn Global Forex, says: "While some European officials are still sounding optimistic
that an EC-UK deal can be struck in the coming weeks, the market
has grown more sceptical."