Investing.com - The pound came under renewed selling pressure on Monday, falling back towards a 31-year trough after the U.K. voted to leave the European Union on Friday, triggering a massive selloff in global markets.
GBP/USD was last down 1.83% at 1.3427, after falling as low as 1.3356 overnight, not far from the lows of 1.3228 set on Friday, the weakest since 1985.
U.K. Finance Minister George Osborne said Monday the vote to leave the EU was likely to lead to further volatility in financial markets but claimed that the economy is as strong as it could be to face the challenges ahead.
Sterling has tumbled amid fears that the decision could hit investment in the U.K. economy, threaten London's role as a global financial capital and trigger months of political uncertainty after British Prime Minster David Cameron resigned on Friday.
The vote could lead to a breakup of the U.K., with Scotland now highly likely to hold a second independence referendum.
The pound fell back towards two-year lows against the euro, with EUR/GBP rising 1.23% to 0.8227, closing in on Friday’s peaks of 0.8312.
The pound was down almost 2% against the yen, with GBP/USD at 137.13, after reaching a 3-1/2-year low of 133.65 on Friday.
The euro also came under pressure against the dollar and the safe haven yen amid fears that the impact of Brexit would cloud the outlook for the EU and the euro area economy.
EUR/USD slid 0.61% to 1.1047, while EUR/JPY was down 0.69% at 112.85.
The dollar was steady against the yen, with USD/JPY at 102.15, after falling to lows of 99.15 on Friday, the weakest level since November 2013.
Traders remained focused on whether Japan would take any action to weaken the yen if it continued to strengthen.
Japanese Prime Minister Shinzo Abe told Finance Minister Taro Aso on Monday to watch currency markets "ever more closely" and take steps if necessary in the wake of the Brexit vote.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.49% at 96.11.