Tokyo: Brexit jitters are still taking a toll on the foreign exchange (forex) and financial markets globally. The British pound on Monday tumbled more than two per cent as markets struggled to shake off deep uncertainty sparked by Britain’s decision to leave the European Union (EU). The British pound fell two per cent to $1.34, still some distance from the 31-year low of $1.3228 touched during Friday’s wild trade.

Sentiment remained weak even though the worst of the turmoil seen on Friday, when global stock markets suffered their biggest decline in nearly five years, had eased.

Still, the US dollar fell 0.6 percent against the safe-haven Japanese Yen to 101.58 yen. The dollar index .DXY, which tracks the greenback against six major peers, advanced 0.8 percent to 96.147, remaining near its three-month high of 96.703 touched on Friday.

The strengthening of US dollar will post some problems for developing economies. The main risk is that the US dollar strengthens from here and remains strong, which would sap emerging markets of liquidity via the trade and capital accounts. And this will hurt the pricing environment in the financial and forex markets. A stronger US dollar would also bring back fears of potential emerging market currency devaluations, which would not help the asset class.

Oil prices in the global markets also eased owing to risk aversion. Although losses narrowed from earlier in the day. International benchmark Brent futures slipped 0.2 percent to $48.33 per barrel, while US crude slid 0.5 percent to $47.41.