By Ian Chua

SYDNEY (Reuters) - Sterling languished near its lowest in more than 30 years early on Tuesday with many investors still wary of calling a bottom even after a dramatic shakeout that saw the currency lose a tenth of its value in two gut-wrenching sessions.

In the latest blow for Britain, ratings agencies Standard & Poor's and Fitch downgraded its sovereign credit standing, judging last Friday's vote to leave the European Union would hurt the economy.

The pound was a shadow of its former self at $1.3222 <GBP=D4>, having skidded from highs near $1.5000 on Friday. It fell as far as $1.3122 overnight, reaching a low not seen since 1985.

Against the yen, sterling bought 134.68 <GBPJPY=R>, pinned near a 3-1/2 year trough of 133.18. The euro stood at 83.30 pence <EURGBP=R>, not far off a two-year peak of 83.79 pence reached overnight.

"While the USD and JPY have retained their safe haven status, the lack of clarity on the future relationship between the UK and Europe suggests that the GBP adjustment still has more to go," said Rodrigo Catril, currency strategist at National Australia Bank.

"Markets remain sensitive to Brexit headlines and in a day devoid of major data releases, the two-day EU Leaders summit commencing later today has the potential to be a weighty source of market volatility."

Central bank policy makers from across the globe have an opportunity to sooth frayed market nerves at a European Central Bank Forum in Portugal as well.

ECB President Mario Draghi is due to speak on "The future of the international monetary and financial architecture" later in the day. On Wednesday, Federal Reserve Chair Janet Yellen participates in a panel.

For now, the safe haven yen held broad gains to the frustration of Japanese officials, who have warned of possible intervention to weaken their currency.

The greenback fetched 101.99 yen <JPY=>, having on Friday broken below 100.00 for the first time since late 2013. The euro was at 112.29 yen <EURJPY=R>, struggling to get off a 3-1/2 year trough of 109.30.

Versus the U.S. dollar, the common currency stood at $1.1012 <EUR=>, not far from Friday's three-month low of $1.0912.

Commodity currencies nursed losses against the greenback. The Australian dollar was last at $0.7345 <AUD=D4>, and well below last week's high of $0.7650.

(Reporting by Ian Chua; Editing by Eric Meijer)