PRESIDENT Obama did not cross the Atlantic just to lend a helping hand to David Cameron’s campaign to keep Britain in the EU. He was also in Germany, offering support to Angela Merkel and her struggle to fight off the various dangers to the bloc.

None, though, may be as threatening as Brexit. Analysts believe that regardless of how the UK votes on June 23, the debate is undermining the euro and the cause of European integration.

“There is a risk,” says Ugo Lancioni, FX and global fixed income portfolio manager at Neuberger Berman. “And there is a good chance the risk will become apparent as we get closer to referendum day.”

Strategists fear the market is overlooking full consequences of a UK vote to leave the EU

Not that the market sees it that way. Currency trades targeting a weaker pound ahead of referendum day are reversing after an encouraging week for the Remain camp. Still, the pound has suffered from the looming vote.

In contrast, the euro has been left alone. There are more pressing reasons to alter the course of the single currency, such as the European Central Bank’s monetary policy, oil, migration problems and the US economy — but not Brexit, it seems.

Mario Draghi, ECB president, said last week that Brexit posed only a ‘limited’ risk to Europe’s economic recovery.

Analysts wonder whether the market is missing a trick. They worry about a cascade of consequences for Europe arising from Brexit, starting with general risk-aversion sentiment, a near-term outlook dominated by exit negotiations with the UK, and the impact of departure on UK allies, particularly Sweden and Denmark, as well as the commitment of more recent joiners to the European project.

The market seems unprepared, says Piotr Matys, emerging market strategist at Rabobank. “There is too much complacency about the risk that countries like Poland could reconsider its place in the EU.’’

In broad terms, Bank of America Merrill Lynch notes the UK is the largest EU economy after Germany. Post-Brexit, the EU would suffer from any British economic deterioration, while a burst of confidence and activity in the UK would put pressure on the EU to reform. Moreover, the bank argues, a post-Brexit collapse in sterling would strengthen the trade-weighted euro and force the ECB to ease policy further.

The FT’s guide to the UK’s EU referendum: Brexit would also mean the loss of the UK’s contribution to EU funds, which amounted to 10pc of the total from members, according to Citigroup. That would hurt growth in the bloc’s central European members, particularly Poland for which the UK is an important trading partner.

“The zloty is under quite a lot of pressure,” says Adrian Owens of GAM. “Poland is a huge beneficiary of the European project, and Brexit creates one more uncertainty.”

Several investors are wary of becoming identified with Brexit trades in the context of a highly charged political campaign, given that most rely on predicting the outcome of the June 23 vote. It is enough of a challenge to distil the broad and long-lasting constitutional, legal and practical implications of Brexit into a simple decision to buy or sell any one stock, bond or market.

Possible investments include trading the difference between the price of Spanish government debt and bonds issued by Catalonia, a region where a separatist movement is popular, if referendums on longstanding issues become more common. The Danish krona may be in play if a British vote to leave prompts a plebiscite on EU membership. Some argue the international investment banking operations of Barclays leave it more exposed than other UK banks.

Meanwhile, the climate of Euroscep­ticism will not abate even if the Remain camp wins. Elections in Spain, France, Germany and Italy come into view, offering plenty of opportunity for populist agendas to court public attention.

Brexit is important for Europe, says Mr Lancioni, “but people are distracted by terrorism and immigration”. Austria’s far right Freedom party topped the poll in last Sunday’s first round of the presidential election.

For now, the market appears to take such risks to the euro lightly. The implied volatility spread between sterling-dollar and euro-dollar one-year options reached historical highs last month. That suggests Brexit uncertainty is priced into sterling but not the euro, “which we believe is unjustified”, says BofA.

So how do you price Brexit in the euro? The currency should be lower, says Mr Lancioni, but other factors are taking precedence, such as oil’s impact on the dollar, better eurozone data and ECB policy easing.

The continent may look a bit more secure if the Remain campaign wins on June 23, says Mr Lancioni — until other concerns take over.

“Problems of a different nature will be top of the agenda — and problem number one is the borders.”

Published in Dawn, Business & Finance weekly, May 2nd, 2016