Thursday 12, October 2017 by William Mullally

Euro responds positively to latest Catalonian developments

Mihir Kapadia, CEO and Founder, Sun Global Investments

Catalonia's separatist leader backed away from an immediate declaration of independence from Spain on Tuesday and this has reduced tensions significantly. The Spanish Parliament are meeting this morning to address the latest moves in the crisis.

The Catalan President Carles Puigdemont told the regional parliament on Tuesday that support for independence in the Oct. 1 referendum had earned Catalonia the right to become a separate state. He said that result gave the wealthy Spanish region a right to be an independent republic, but then handed responsibility for declaring independence to regional lawmakers and asking them for more time to negotiate a potential secession with the central government in Madrid.

Spanish bonds and the euro responded positively to the new yesterday and the euro has extended its rally against the dollar in Asia. The markets and investors are confident that Spain would be able to broker a deal internally, especially as Mr Puigdemont offered a window for the possibility of dialogue with Madrid yesterday. 

 

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