He said sterling has already fallen around 10% against the US dollar and euro since the autumn, with many blaming the falls on investors' nervousness surrounding interest rate rises.
However, he said although interest rates have played a part, the fall can be largely attributable to Brexit concerns.
"I think the currency move is the barometer for Brexit," the CIO (pictured) said.
"We have certainly seen some foreign investors move away in terms of currency moves, even if UK equity markets have held up well compared to others in the past few weeks.
"We have seen a pretty big readjustment, it has been huge. The pound is down 10% against the US dollar and the euro and is testing the lows of 2009 and 2002 against the dollar.
"Currency moves are a combination of things. There is that differential factor between the Fed moving early and the Bank of England pausing, but I think a lot of it is Brexit."
Mustoe added further volatility will be on the cards as referendum polls are failing to give a clear indicator of which way the vote will swing. Many commentators believe the referendum will be held this summer.
"Investors will increasingly this year focus on the potential for a referendum and its outcome. Currency has been the mechanism of signalling that.
"Markets hate uncertainty and we do not know the timetable exactly for the vote. Given the way the opinion polls are at the moment we cannot really call the outcome - and that is the worst situation for UK markets," he said.
Sterling, in particular, is vulnerable as investors shift away from the UK but such a move could also have a detrimental effect on the underlying economy.
"I think a major part of the fall in sterling has happened, however there is still scope for further volatility depending on how the politics/opinion polls play out. The market craves certainty and the longer this takes to become visible the more the currency will move around," Mustoe said.
"If companies, and later individuals, hold off and wait to see what the result is before they make further investment, that becomes an impact on the real economy. That is the dilemma we face in the UK this year," he added.
Mustoe is CIO and fund manager of the £770m Global Equity Income fund which has returned 27.4% over the past three years to 19 January, compared to the IA Global Equity Income sector average return of 18.2%, according to FE Trustnet.
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