Citi: Another wave of selling in London on Wednesday morning drove it to less than $1.39, within 4 cents of levels last seen when it sank to parity to the dollar in the mid-1980s, according to Euro News. It had steadied to $1.3948, down half a percent on the day by 1650 GMT. There are very few people willing to take the other side of the move lower, said Josh O’Byrne, a strategist at Citi. The aftermath of Prime Minister David Cameron announcement of a June 23 referendum on Brexit has driven the worst three days for the world fourth most traded currency since the depths of the financial crisis in 2009. 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. HSBC, Britain biggest bank, said the currency could lose up to 20 percent of its value and UK economic growth could be up to 1.5 percentage points lower next year if Britain votes to leave. 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.
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