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EUR: euro strengthens as Spain and Catalonia down tools

By Ricky Bean October 12th, 2017

The euro was the strongest performer yesterday as it strengthened against the pound and US dollar. The allaying of fears surrounding Catalonia’s independence from Spain – even if only temporary – had the effect of calming investors as they piled into the single currency.

The situation is not completely resolved however, with Spain’s leader asking for further clarification on the issue. If Catalonia does break from the rest of Spain it could prove disastrous for Spain, Catalonia and the eurozone in general. If it does happen there is no telling what it will do to the euro, but perhaps it could halt the remarkably consistent performance of the euro in 2017.

Like the UK, it is a quiet day for eurozone economic data. European Central Bank member Peter Praet is due to speak this evening and it will be interesting to see if he echoes the recent sentiments coming from the BoE and Federal Reserve – in terms of raising interest rates.