Sterling managed to claw back some ground against the dollar and euro today. 

But analysts said that in the context of an historic 11% fall after Britain voted last week to leave the EU, this was merely a pause rather than the start of any upward trend. 

The pound's rise would under normal market conditions be considered a decent rebound.

Sterling fell about 7% on Friday alone - its biggest one-day fall in the post-1973 floating-exchange-rate era. 

The highest it hit in afternoon trade today was $1.3330, still almost 17 cents lower than where it was trading before the referendum results started to be announced. 

Ratings agencies S&P and Fitch both downgraded Britain's sovereign credit standing last night, judging Brexit would hurt the economy, though that did not seem to further dent sterling.

Some analysts said one factor helping to calm investors were signs there was no rush among British and European politicians to trigger the legal "Article 50" process that starts mechanisms for a state to leave the EU. 

The world's biggest banks are considering a fall in sterling to $1.20, as fears of recession and banking trauma after Brexit threatened a return to the dark days of the early 1980s. 

Forecasts for its rate by the end of the year have been cut by up to 30 cents since Friday morning. 

Most analysts agree the euro will suffer along with sterling from a fall in demand and investment as European businesses worry about fallout, reducing sterling's weakness against the single currency, though it has fallen sharply against that too.

It rose 0.62% against the euro to €1.2067, having hit its weakest for more than two years yesterday. 

Against the safe-haven yen, which had rallied strongly after Thursday's vote and hit a three and a half year high against the pound, sterling rose as much as 1.5% on the day to trade as high as 136.77 yen.