The euro shot to a four-month high in mid-morning trading despite the fact Spanish Prime Minister Mariano Rajoy is yet to accept the result of the regional Catalan elections held on 21 December.
PM Rajoy has refused to accept the result of the regional Catalan elections, which saw pro-independence parties gain an absolute overall majority.
The three pro-independence parties won 70 seats out of a possible 135, ahead of the 68 required to form a government. Opinion polls had predicted the separatists would fall short of a majority.
Furthermore, according to the BBC, Spain's economy minister Luis de Guindos said the independence crisis had cost the country €1bn with Catalan growth slowing from 0.9% to 0.4% in Q4.
"Catalonia used to have growth above that of Spain, it was one of the drivers of the Spanish economy," de Guindos said. "However, in the fourth quarter, it has become a burden."
Amid the crisis, 3,100 firms have already relocated their headquarters elsewhere across Spain with one of the country's largest banks, Banco Sabadell, moving to Alicante "in order to protect the interests of customers, shareholders and employees".
However, the euro climbed to a four-month high, rising 0.52% to €1.207, as at 10.59am as a result of positive expectations of continued economic recovery in the eurozone this year.
The Catalan crisis had hindered the euro towards the end of 2017, with the regional election result causing it to fall as much as 0.2% to $1.185 overnight.
After the election result, Carles Puigdemont, the former Catalan leader, who is currently based in Brussels amid fears of his arrest after the independence push in October, said: "The Spanish state has been defeated. Rajoy has received a slap in the face from Catalonia," according to the Financial Times.
Yukio Ishizuki, senior currency strategist at Daiwa Securities, told Reuters: "Some speculators appeared to have sold the euro in thin trading.
"The overall impact of the Catalan vote on the euro and the wider global markets is likely to be limited, however. Catalonia cannot become a sovereign state if no other country recognises its independence. It will not even be able to have its own currency under such conditions."
Tensions have run high in Catalonia after the Spanish police attempted to stop an independence referendum on 1 October, where hundreds were injured. However, over 2.3 million Catalans cast their vote, with 90% in favour of independence.
The regional government subsequently declared independence from Madrid with assembly members voting 70 in favour, 10 against and two unmarked. Madrid responded by arresting some members of the regional government, while also calling new elections.
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