The pound shed 0.5% to reach $1.2871 as traders digested a YouGov poll indicating the Tories had fallen to a 5 percentage point lead over Labour.
The currency also fell against the euro, dipping to €1.1469.
The YouGov poll came after the recent terrorist attack in Manchester suggesting the incident may have had a positive effect on Labour’s chances in the election, adding to the concern on currency markets.
Immediately after prime minister Theresa May called the election the Conservatives’ lead stood at 12.7 points, but it has narrowed sharply in the past two weeks.
Elsewhere, the FTSE 100 index of the biggest UK shares was buoyed by news of fresh falls for sterling, which represent good news for multi-national exporters, with the index trading 0.15% higher at 7528.89 points.