Sterling languished near its lowest in more than 30 years early on Tuesday with many investors still wary of calling a bottom even after a dramatic shakeout that saw the currency lose a tenth of its value in two gut-wrenching sessions.
In the latest blow for Britain, ratings agencies Standard & Poor's and Fitch downgraded its sovereign credit standing, judging last Friday's vote to leave the European Union would hurt the economy.
The pound was a shadow of its former self at $1.3222 GBP=D4, having skidded from highs near $1.5000 on Friday. It fell as far as $1.3122 overnight, reaching a low not seen since 1985.
The greenback fetched 101.99 yen JPY=, having on Friday broken below 100.00 for the first time since late 2013. The euro was at 112.29 yen EURJPY=R, struggling to get off a 3-1/2 year trough of 109.30.
Versus the U.S. dollar, the common currency stood at $1.1012 EUR=, not far from Friday's three-month low of $1.0912.
Central bank policy makers from across the globe have an opportunity to sooth frayed market nerves at a European Central Bank Forum in Portugal as well.
ECB President Mario Draghi is due to speak on "The future of the international monetary and financial architecture" later in the day. On Wednesday, Federal Reserve Chair Janet Yellen participates in a panel.
Oil Market was once again under pressure overnight as Brexit inspired sell-off continuing. West Texas Intermediate fell 2.8% to US$46.33 a barrel. Across the ditch, Brent lost 1.8% to US$47.50 a barrel.
Ratings agencies rip into UK's credit score after Brexit vote
S&P downgraded the nation by two notches, from "AAA" to "AA," citing last week's referendum that approved a British exit from the European Union. Fitch, meanwhile, moved its rating from "AA+" to "AA."
Fitch Ratings also downgraded its ranking for Britain's creditworthiness by one notch, and similarly said more cuts could follow.
It was the first time S&P had chopped an AAA-rated sovereign credit rating by two notches in one move.
"In our opinion, this (referendum) outcome is a seminal event, and will lead to a less predictable, stable, and effective policy framework in the UK," S&P said in a statement.
Finance minister George Osborne said on Monday the British economy was strong enough to cope with the volatility caused by Thursday's referendum.
But the vote has plunged the country into a political crisis, with the ruling Conservative Party looking for a new leader after Prime Minister David Cameron said he would stay on until October, delaying the launch of negotiations with the EU and leaving the country's economic prospects under a cloud of uncertainty.
The added prospect of a new independence referendum in Scotland, which voted strongly to stay in the EU, threatens the constitutional and economic integrity of the United Kingdom, S&P warned.
Fitch more than halved its growth forecast for Britain's economy in 2017 and 2018 to just 0.9 percent for both years, from2.0 percent previously.
The remaining major ratings agency, Moody's, which took away Britain's AAA-rating in 2013 because of the country's high levels of debt and slow growth, said on Friday it could cut the rating further.
Moody's will downgrade the credit rating outlook for major British banks to "negative" on Tuesday because of the fallout from the vote to leave the EU, Sky News reported, citing sources.
Reference: Proactive Investors, Reuters, CNBC
Thai
Eng