FX round-up: Sterling savaged by traders fleeing Brexit fears

This translated to a wall of red on the boards. At roughly 17:10 BST, sterling was down 0.62% to $1.2941, and was lower 0.68% to €1.1677. It fell on commodity currencies, and the yen, too.

"A focus upon the continued deterioration in the pound and euro highlights the negative economic consequences of that (non-binding Brexit) vote," said IG market analyst Joshua Mahony.

"In a world where around $10 trillion of global government credit has yields at or below zero, it is clear that investors are desperately seeking for safety wherever it can be found."

Unsurprisingly, gold hit fresh 27-month highs and UK 10-year gilt yields tightened further. The FTSE 100 fell, with property shares particularly under the cosh and those of miners zipping ahead.

The outlook on the cable for end-2016 is increasingly bleak -- a somewhat grim Betway quotes 6/4 odds for the UK unit to plumb $1.1-$1.19 by year's end -- casting a pall over many a Summer getaway by British holidaymakers.

Rabobank Financial Markets said although it was hoped sterling's recent nose-dive would be supportive for exporters, it would also bring in some unwelcome elements of imported inflation.

UK's Treasury has indicated readiness to act in concert with Bank of England to support Funding for Lending.

"It is our view," wrote Rabobank, "that this may be more favoured than a (interest) rate cut at least as an immediate policy response to the Brexit vote. We maintain our forecast of GBP/USD1.26 on a one-month view."

All eyes are thus on BoE's Monetary Policy Committee meeting next week -- the market is pricing in a possible loosening this summer, but the amount and timescale is up for debate -- and on the US Federal Reserve Open Committee's meeting minutes later tonight.

"Unfortunately these (FOMC minutes) aren't likely to shed too much light on the Fed's thinking vis-a-vis the state of the US economy now, particularly in light of recent events," said Michael Hewson, chief market analyst at CMC Markets UK.

At about 17:10 BST, the dollar was mixed, having fallen on the euro, aussie and yen, but gaining on the loonie, kiwi and rand. The dollar spot index was up 0.05% to $96.216.

Earlier today, Federal Reserve Board Governor Daniel Tarullo said he wanted to see more evidence inflation was moving back to the Fed's 2% target before making another hike in the short-term policy rate.

"I certainly to this point have not seen that kind of evidence."