The pound has fallen sharply in trading in Asia on Monday, adding to Friday’s record one-day decline.
Sterling was trading at $1.3365, down almost 3% from Friday’s close. Against the euro it was trading at €1.2147, down 1.4%.
On Friday the pound had its biggest one-day fall against the dollar, at one stage sinking as low as $1.3236.
George Osborne will issue a statement before the start of trading in the UK in a bid to calm the markets.
The Chancellor has not spoken publicly since the Leave campaign won Thursday’s referendum.
Authorities in Asia have been taking action to stabilise financial markets.
After an emergency meeting, Japan’s finance minister Taro Aso said that he has been instructed by Prime Minister Shinzo Abe to take steps to stabilise the currency markets if needed. “Risks and uncertainty remain in financial markets,” Mr Abe said.
The rising value of the yen is a concern to the Japanese government, as it makes the nation’s exports less competitive.
After plunging almost 8% on Friday, Japan’s benchmark share index, the Nikkei 225, added 1.3% on Monday.
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In China the central bank weakened the official value of the yuan by 0.9%, the biggest move for the currency since August of last year.
On Sunday night Christine Lagarde, head of the International Monetary Fund, said that the UK’s vote to leave the European Union had caught the financial markets by surprise.
But despite that, there had been “no panic” and the markets were “under control”.
Tohru Sasaki, head of Japan market research at JPMorgan Chase in Tokyo, said falls in European markets would “not cause a financial crisis with the magnitude of the Lehman shock in 2008″.
Stock markets plunged on Friday, with more than $2tn (£1.5tn) wiped off the value of global stock markets, according to Standard and Poor’s Dow Jones Indices.
That was the biggest one-day loss in market value – even greater than the value wiped out following the collapse of Lehman Brothers during the 2008 financial crisis, Standard and Poor’s calculated.
The Chancellor’s statement on Monday comes amid forecasts of further falls for the pound.
Jeremy Cook, chief economist at World First, said: “We are still looking for another 10% fall for the pound against the dollar in the coming months as data confirms the economic slowdown and monetary policy expectations increase.”
Traders will be watching the UK’s financial position closely over the coming months.
“The funding position of the UK, with its twin current account and fiscal deficits, are the next pressures to weigh,” Mr Cook said.
The UK’s current account deficit measures the balance of trade, investment income and money transfers.
That deficit means that the UK must borrow to pay its way in the world.
The fiscal deficit refers to the gap between government expenditure and income that has to be financed by borrowing.
Article source: http://www.bbc.co.uk/news/business-36636853