The pound is cheap, very cheap – but that does not mean that it won’t get cheaper still in the next few weeks. In the short run, the prime minister calling a snap election might well weaken it further.

Sterling has become the prime indicator of the level of uncertainties in British politics. Markets hate uncertainty and the tortured path to Brexit has delivered that in spades. The rule of thumb is that the greater the prospect of the UK leaving the EU without an agreement, the weaker the pound. But there are several twists to this story, including the possibility of a sudden bounce as and when the fog clears.

There are two broad ways of valuing a currency. One is to look at its historic range; the other to calculate its intrinsic value.

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