Euro Dips After Catalan Separatists Secure Narrow Victory

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.

However, Ciudadanos, the anti-independence party, won the majority of the vote to become the largest party, while pro-independence parties only won 48% of the vote.

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.

On the news, the euro fell as much as 0.2% to $1.185 overnight and was down 0.1% to £0.886, as the vote reignited concerns about Catalonia's future relationship with Spain and the European Union.

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.

In particular, Spanish banks have seen their share prices take a hit since Catalonia pushed for independence, with many relocating their headquarters. These include Banco Sabadell, which moved to Alicante "in order to protect the interests of customers, shareholders and employees".