The single currency dropped dramatically in just a few minutes, Bloomberg claimed.

Dramatic market news would normally cause such a drop but that was certainly not the case on Christmas Day, analysts are pointing the finger at computer-driven trading.

Qi Gao, a Hong Kong-based foreign currency strategist for Scotiabank, supported the theory and told the Financial Times that the sell-off had been driven by “algo [algorithmic] trading”.

The currency hit the lowest point since mid July.

Algorithmic trading is a method of executing a large order using automated pre-programmed trading instructions accounting for variables such as time, price, and volume to send small slices of the order out to the market over time.

They were developed so that traders do not need to constantly watch a stock.

Hiroshi Yanagisawa, chief analyst at FX Prime by GMO Corporation in Tokyo, said: “There was nothing of substance, probably some algo-related, machine-based happening amid an absence of bids in a holiday market.”

The market is nervous following last week’s regional elections in the Spanish region of Catalonia, which weakened the currency and triggered a Friday sell-off in Spanish stocks.

The pro-independence parties managed to retain an overall majority in the Parliament although the unionist Ciudadanos won the most seats.

Bankinter’s analysts said: "The electoral results in Catalonia do not clear the political scenario and the Ibex 35 will again lag behind the rest of the stock exchanges.”

A similar landscape was given by Renta 4 analysts, who pointed out that after the vote on December 21 political uncertainty remains over both Spain and Catalonia, although they ruled out any “extreme” scenarios.

XTB analyst Joaquín Robles said: "We are perhaps facing the worst scenario for the interests of Spanish investors, since it is most likely that the pro-independence group will return to rule.”

He added that the search for independence through the legal channels, instead of unilaterally, would "reassure" investors.

Moody’s believed the electoral result illustrated “the persistent” polarisation of the Catalans and it is "negative" for the economic growth of Spain.

Likewise, the US firm believes that the approach to the independence procedures will "further weaken the already weak finances of the region", since the electoral programmes of the pro-independence parties lack fiscal consolidation measures and the focus of their political agenda is the road map towards independence.

It follows data from the Office for National Statistics (ONS), UK year-on-year growth beat expectations on Friday, with the third estimate accelerating to 1.7 per cent in the third quarter.

This was up from the consensus forecast of 1.5 per cent but below the previous 1.9 per cent.

Quarterly, the final estimate came in at 0.4 per cent, however, this was consistent with expectations and in-line with the previous reading.

This confirms that Britain’s economy has now expanded for 19 quarters in a row, with robust growth in sectors like manufacturing, agriculture, production and services driving the reading higher.

Ian Stewart, Chief Economist at Deloitte shared his optimism on the readings.

He said: “The UK’s performance has been rather better than the gloomy talk would suggest.

"Growth has come in stronger than expected a year ago and the pace of activity has edged up since July.

"A year ago the near-universal view was that unemployment would rise in 2017; instead it has fallen by 150,000 and the jobless rate is at a 42-year low.”