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According to Reuters, the British currency was down 0.8 per cent against the dollar at 08:20 BST, taking it to $1.5232.
The euro was also up against the pound, rising 0.6 per cent to 88.32p.
Polls conducted for the Sun and Mail on Sunday newspapers indicate the Liberal Democrats are currently ahead of the Conservatives and the Labour Party.
Should this popularity be reflected in votes when the election takes place on May 6th, it would raise the chances of a hung parliament being formed.
Investors fear this would reduce the government's chances of cutting the budget deficit and hamper the UK's economic recovery.
The dip in the pound continues a trend seen last week, when support for the Liberal Democrats surged after party leader Nick Clegg performed well in a televised debate.
Posted by Clive Arneil
