Sterling falls further as Brexit risks intensify

Sterling sank to a seven-year low today as companies and investors rushed to insure themselves against the chances of a British exit from the European Union that HSBC said could knock 15 percent off the value of pound.

The aftermath of David Cameron's announcement of a June 23 referendum on "Brexit" has driven the worst three days for the world's fourth most traded currency since the depths of the financial crisis in 2009.

Another wave of selling in London this morning drove it to less than $1.39, within 4 cents of levels not seen since it sank to parity to the dollar in the mid-1980s.

"There are very few people willing to take the other side of the move lower," said Josh O'Byrne, a strategist at Citi. "Knowing now that the vote will be in June, there is a greater incentive for those that haven't hedged GBP exposure to do so."

The cost of currency derivatives, which allow companies, big institutional investors and hedge funds to protect future revenues or asset values held in sterling against sharp swings in the currency, jumped to their highest in more than four years.

HSBC, Britain's biggest bank, said the currency could lose up to 15 percent of its value and UK economic...