'The market appears more relaxed than it is' — Traders shunning the UK because of Brexit are in for a pound 'tsunami'

Traders shunning the UK until the outcome of Brexit becomes clear are in for a shock.

That’s according to Neil Wilson at Markets.com, who says that the market appears more relaxed than it is. The UK government’s ongoing battle over Britain’s exit from the European Union is again up in the air, and, worryingly for investors, Theresa May has now pushed Britain right to the point of crashing out of the EU without a deal.

“For sterling there’s a lot of uncertainty, and I think what you are seeing is that it’s near impossible to take a position on the pound right now, so the market appears more relaxed than it is,” Wilson wrote in an email to clients on Thursday.

“This will not remain the case for long – expect a surge in realised volatility ahead: the tsunami is coming,” he wrote. “Leave with May’s deal and the GBPUSD spot price goes to 1.38-1.40, crash out without one, and it’s back to 1.20 or even lower.”

Here’s the pound versus the dollar over the past three years, before, during, and after the vote to leave in June 2016.

The pound is down 0.2% against the dollar as of 10.10 a.m in London (6.10 a.m ET).

GBPMarkets Insider

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.