The euro fell sharply against the US dollar in the morning against the backdrop of news from Spain, which, although expected, had an immediate effect.

The euro plummeted after it became known that the government of Spain will hold a meeting on Saturday to propose measures that will deprive Catalonia of certain powers. Such information came from the authorities. In addition, the Spanish government will have to turn to the Senate for support on any further action. The authorities took such measures because the head of Catalonia did not respond to the order to abandon separatist aspirations.

The aggravation of the political crisis in Spain could have a negative impact on the euro but only if the conflict takes new turns, since the division of Spain could entail a number of political crises in other countries.

Good data on the US labor market did not really help the US dollar in the afternoon. According to a report by the US Department of Labor, the number of Americans who filed initial applications for unemployment benefits for the week starting from October 8 to 14 decreased by 22,000 and amounted to 222,000. Economists projected a growth of 240,000.

In general, the technical picture for the EURUSD pair remains on the side of the euro despite a slight decrease in the first half of the day. As expected, the growth above 1.1815 opened real prospects for further upward correction in risky assets in the expectation of renewing the monthly highs of 1.1850 and 1.1890.

The British pound declined in the morning after the release of a weak report indicating that in September of this year, retail sales in the UK declined compared with August.

According to the national statistical agency retail sales decreased by 0.8% compared to the previous month after an increase of 0.9% in August. Economists had expected retail sales to remain unchanged. In the third quarter of this year retail sales grew by 1.2% in comparison with the same period in 2016. This is the weakest rate in the last few years.