Pound is probably decrease no matter Brexit

Russell Clark of Horseman Capital notes that interest rates are determined based on fundamentals such as current account and fiscal deficits.

Russell Clark of Horseman Capital notes that while the relative valuations of currencies are driven by differences in current and expected interest rates, these rates should ultimately by driven by fundamentals such as current accounts and fiscal deficits. On both these measures the UK has sharply underperformed its G4 rivals over recent years — yet the value of the pound has yet to adjust. Compared with the Eurozone, United States and Japan, the UK has had by far the largest current account deficit as a percentage of gross domestic product since the middle of 2012. At the same time the UK’s fiscal deficit has significantly worsened relative to the Eurozone economies and the US.

This gives ground to think that sterling will depreciate regardless of the vote, as if Britain leave the EU if it can become very sharp.

Many traders also note that long positions in pounds do not have enough good risk / reward even in case for staying in the EU.