Euro drops after Catalan leader says the region has 'won the right' to independence

LONDON - The euro is lower on Monday morning amid jitters about the political situation in Spain.

The Spanish region of Catalonia attempted to hold a much-contested independence referendum on Sunday and Catalonia's leadership has declared the region has "won the right" to independence.

"With this day of hope and suffering, the citizens of Catalonia have won the right to an independent state in the form of a republic," Catalan leader Carles Puigdemont said in a televised statement.

"My government in the next few days will send the results of today's vote to the Catalan parliament, where the sovereignty of our people lies, so that it can act in accordance with the law of the referendum."

Catalan officials claimed that around 90% of votes cast were for independence with a turnout of around 43%. Citizens who favour independence were far more likely to turn out to vote, while those who do not are more likely to have stayed at home.

Spain's central government does not recognise the referendum, with Prime Minister Mariano Rajoy saying it made a "mockery" of democracy.

"At this hour I can tell you in the strongest terms what you already know and what we have seen throughout this day. There has not been a referendum on self-determination in Catalonia," Rajoy told the press.

Regardless of its legitimacy, the euro is falling. The single currency is down by more than 0.5% against the dollar as of 8.25 a.m. BST (3.25 a.m. ET) on Monday morning, falling below the $1.18 mark.

That fall reflects fears that prolonged political strife in Spain could threaten the stability of the eurozone. Spain is the fourth largest eurozone economy.

Sunday's referendum was marred by violent scenes as police were ordered to confiscate ballot boxes and prevent people from voting. Videos surfaced of officers forcibly dragging would-be voters from polling stations, including women and the elderly.

See the latest EUR-USD movements here.