The pound suffered a "flash crash" on Friday morning, its biggest drop since Britain voted in June to leave the European Union (EU), with confused traders scrambling to understand the reason for the sharp sell-off.
Sterling fell off a cliff in early Asian trade to hit $1.1841 - its lowest level since mid-1985 - before immediately rebounding to around $1.2450.
It also collapsed against the euro, with the single currency hitting a seven-year high of 94.15 pence, before easing slightly as minutes from the European Central Bank indicated it is unlikely to trim its stimulus any time soon.
The pound has hit several fresh 31-year lows against the dollar this week, after British Prime Minister Theresa May outlined a timetable at the weekend for Britain to leave the EU by 2019.
However, experts were left scratching their heads over the reason for the volatility, with some pointing to low trading volume and human error.
Comments from French President Francois Hollande calling for tough negotiations with Britain over its exit were also cited.
"What we had was insane - call it a flash crash - but the move of this magnitude really tells you how low the currency can really go," Naeem Aslam, chief market analyst of Think Markets wrote in a commentary.
"Hard Brexit has haunted sterling," he said, according to Bloomberg News.
The fright in foreign exchanges was reflected on Asia's stock markets, with losses across the board. Tokyo was down 0.2 per cent by lunch and Hong Kong slipped 0.4 per cent, while Sydney and Seoul each lost 0.2 per cent.
The fall in sterling was the sharpest since Britain's vote on June 23 to leave the EU, which sent shockwaves through global markets, wiping trillions off valuations. The pound tumbled more than 10 per cent at one point before rebounding.
The pound has lost about 14 per cent against the dollar since the referendum.
Some chalked up Friday's drop to exaggerated moves caused by relatively lower volume trading on the pound in Asian markets, while others suggested human error, or a so-called "fat finger" issue.
"It seems that a bunch of selling orders came in all together - possibly due to some technical reason - and that sent it plunging in a burst of thin trading ahead of US employment figures (today)," Minori Uchida, head of Tokyo global markets research at Bank of Tokyo-Mitsubishi UFJ, told AFP.
"Brexit has returned as a major theme in the market. The currency has stabilised a bit now, but the nervous trading is likely to continue," Uchida added.