While the euro previously suffered due to tensions between Spain and Catalonia, which was on the verge of declaring independence after voting in favor of it in a referendum not approved by Spain, tensions have now eased a little.
Catalonia has shown a readiness to negotiate rather than jump to quick action. They have also announced that it may take weeks until they declare independence, if they do so at all. Many speculate that if the King of Spain agrees to negotiations, a higher degree of autonomy will be allotted to Catalonia, while still retaining it as a Spanish territory.
This has permitted markets to recover from the initial shock. Stocks recovered and began increasing in price again; so did the euro, which reached a two-week high today at $1.1835. Another important boost for the euro was the dollar weakening due to tensions with North Korea.
Regardless, the situation in Spain is still tense and could cause another slip in the euro, not to mention the rising probability of a rate hike in the United States will likely boost the dollar against all currencies.
