Joe Rundle, head of trading at ETX Capital, described the win for Leave as the “one of the biggest market shocks of all time”.
He said: “The pound has collapsed to its lowest level in over 30 years, suffering its biggest one-day fall in living memory. Panic may not be too strong a word – the pound could have further to go over the next couple of days as markets digest the news.
“It’s worth noting that trading desks are not fully staffed and these are only the initial reactions. We’re waiting for the big money to crank into action over the coming days and even weeks, which will likely exert further downward pressure on sterling.”
The FTSE is forecast to open up 9% down as investors flock to safe havens such as gold.
Sterling had hit 1.50 dollars shortly after polls closed at 10pm on Thursday, but as Leave votes flooded in in increasing numbers the strength of sterling plummeted.
Kathleen Brooks, research director at City Index, said: “Financial markets seriously underestimated the possibility of a Brexit; the pound may have fallen in the lead up to the vote, but not to the lows that it has reached today.
“We expect further falls, however the outlook is extremely uncertain. If David Cameron can remain as Prime Minister for the next few months then he will push for a trigger of article 50, which will start the process of leaving the EU immediately.”