Sterling suffered its most volatile session in living memory and hit its lowest level since the 1985 Plaza Accord as Britain voted to leave the European Union, triggering a rush into safe-havens such as the yen and the dollar.
The euro also dropped more than three percent against the dollar while the Swiss franc firmed along with the yen, though the wild moves made traders wary of intervention by Group of Seven countries.
“The markets are in a panic after optimistic swings yesterday. People are selling the pound and anything that is close to it while buying assets that are remotely related to the pound as possible, such as U.S. Treasuries and the yen,” said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.
The pound fell more than 10%, its cheapest level since September 1985, when five major economies at the time agreed to weaken the dollar.
“It is wild,” said Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital in Sydney.
“There is still a way to go yet,” Oliver added. “Even if the vote is to leave, there is a lot of water to go under the bridge before Britain actually leaves the EU. We don’t know what sort of deal they are going to cut with the EU.”
Against the yen, sterling was down a massive 13.8% on the day.
The euro rose 8%, hitting its highest level in more than two years.
Yet the euro was under pressure against most other currencies as investors fret Brexit could spark anti-establishment movements in other European countries, some of which have already seen decline in traditional political parties.
The referendum results fanned worries that it could lead to further discontent among European integrations and rise towards nationalism or regionalism, with an election re-run planned in Spain on Sunday after an inconclusive election last December.
The euro fell 3.6% against the dollar.
The sharp moves raised worries that global policymakers may take action to support the pound.
“We need to be careful about intervention in such a case. I think there’s more than enough excuse for G7 to intervene,” said Koichi Yoshikawa, executive director of finance at Standard Chartered (LON:STAN) Bank.
As Brexit anxiety grew, so too has demand for the safe-haven yen, which jumped on the greenback and euro.
Japanese Finance Minister Taro Aso declined to comment when asked about the possibility of joint G7 intervention.
The Australian dollar, often sold off in times of heightened market stress, fell more than 3.6%.
Emerging market currencies were also sold heavily. The South African rand fell over 7% while the Turkish lira fell more than 4%.