Sterling could slump 11 percent on a trade-weighted basis against a basket of major developed market currencies if Britain votes to leave the European Union on June 23, Goldman Sachs analysts said on Wednesday.
If a "Brexit" happens, which traders fear would hurt the European economy, Goldman analysts said in a research note they expect the euro to weaken 4 percent.
Their latest view on a possible drop in sterling was less severe than a forecast of a 15 to 20 percent fall seen in early February.
Recent polls have given conflicting snapshots on how Britons would vote in the referendum.
Betting odds indicate the implied probability of a British vote to stay in the EU is 62 percent, according to Betfair.
On Wednesday, sterling rose 0.6 percent against the dollar at $1.4204 and gained 0.2 percent versus the euro at 79.25 pence .
The euro was flat at $1.1257 and 119.31 yen
If traders were to shed the pound and euro due to a Brexit, they will likely scoop up perceived lower-risk currencies, they said.
In trade-weighted terms, they projected the yen would appreciate by 14 percent against other Group of 10 currencies, while the Swiss franc would strength by 8 percent and the Norwegian crown by 3 percent.
"Our conclusion fits well with the notion that some currencies (such as the Swiss Franc and Japanese Yen) are 'safe havens' and tend to outperform when uncertainty increases, while others (the Euro, for example) tend to underperform," the Goldman analysts wrote.