NEW YORK (TheStreet) -- Global currencies are beginning to recover on Tuesday from their dramatic highs and lows, after the shock of last week's vote by the U.K. to leave the European Union begins to wear off a bit.
The U.S. dollar is lower by 0.28% to $96.28, the pound is rising by 0.76% to $1.33 and the euro is higher by 0.2% to $1.10, CNBC reported early this afternoon.
The pound is at the "epicenter of the storm," Deutsche Bank's Alan Ruskin said on CNBC's "Squawk on the Street" today, noting that he did not expect a huge bounce back.
Ruskin's concern with the decline in the pound, which lost about 12% of its value after the Brexit, is how the U.K. will finance its "very large current account deficit" long term.
"In the past, two-thirds of (the deficit) was roughly financed by foreign direct investment inflows. I suspect those are going to be outflows. We're going to have record, narrow basic balanced deficit. So I think that's the big Achilles heel the pound faces in the medium term," Ruskin explained.
"And if the pound faces more pressure, how much of that spills over into the Euro?" CNBC's Sara Eisen asked.
The answer is not much. "Oddly enough there's some symmetry here. The Euro, in fact, has a large current account surplus and some of the foreign direct investment flows out of the U.K. will actually find their way into the Euro area. So, I think the Euro will remain relatively resilient," Ruskin replied.
Meanwhile, the U.S. dollar will not strengthen too much from here, WorldWideMarkets' Joseph Trevisani told Eisen.
"What we saw (last week) was a reaction of markets that were wrongly positioned for this vote. No one expected this. So, the initial move that we saw was a shock," Trevisani noted.
The "rest of this" is how the Brexit plays out on the U.S. economy and Trevisani does not think it will have a tremendous effect. The only other concern would be of the effect of a continuous fall in equities on consumers but that did not continue today.
In addition, the Chinese currency, the yuan, is slipping to a five-and-a-half year low, Sara Eisen reported.
"That I think is maybe as important as what's going on with the British and the Brexit because the last time the Chinese had the currency at this level, both in August and in January, there were huge reactions around the world," Trevisani commented.
The U.S. markets have not seen any downside so far from the yuan decline. However, if the yuan goes through the "old high line" appreciably, then the U.S. will see more problems, but for now, the market is not focused on that, he stated.
When the concern over Brexit uncertainties dies down a bit, the market worry will be back on China, Trevisani concluded.