The euro had no problem staying ahead of the British pound this week. It picked up a cent and a quarter on the week, extending its post-referendum gain to 11%. Sterling was in trouble again as the Brexit monster was reported to be emerging from its lair. As in the last three months there were no actual sightings but the rumour mill was churning with talk of a "hard Brexit" and the chancellor was said to have given up hope of remaining in the EU's single market.

Broadly, investors tended to favour the premier league currencies - the US dollar, the euro, the yen and the Swiss franc - over those of commodity exporters and emerging markets this week. It was symptomatic of a mood of caution that prevailed over all financial markets. The failure of the European Central Bank and the Bank of Japan last week to wheel out new stimulus measures has led investors to consider the possibility that industrial-scale central bank money-printing is coming to the end of the road.

People living in Great Britain can now only receive Housing Benefit for 4 weeks if they are out of the country. Previously, housing benefit claimants could continue having their rent paid for up to 13 weeks.

The new rules, which came into force last month, prevent claimants from taking long drawn-out trips outside Great Britain while receiving taxpayer help with their rent, as well as bringing Housing Benefit into line with Jobseeker’s Allowance and other working age benefits, which already have stricter limits.

A few years back, the European debt crisis hit the "Piigs" with a resounding clout: Portugal, Italy, Ireland, Greece and Spain.

The European Union and the European Central Bank lent large sums to all these countries. As we all know, Greece have defaulted and remains in a perilous position. Ireland, and to a lesser extent Spain, have recovered and resumed growth, whilst Portugal and Italy have not.  The Italian crisis is larger and more significant since it is a much larger economy than Portugal and Greece. There is much concern for the Eurozone banking sector, as capitalisation is needed urgently.

The highlight for the euro came on Monday when the leaders of France, Germany and Italy met on an aircraft carrier to exchange pleasantries and discuss the future of the EU. It was the euro's only newsworthy outing in a week of European Central Bank silence and unremarkable €Z economic data. Preliminary purchasing managers' index readings from Euroland pointed to continuing growth in the private sector despite slightly decreased business confidence.

The US dollar and British pound both did better than the euro this week, strengthening by half a cent and one cent respectively.

Whilst all news media appears to be centred upon the UK and Brexit, the events happening in the European Union (EU) are largely being ignored.

However, these EU events are far more serious to the global economy and the EU, which centres around Italy.
The country's banking system is swamped with debt and the Italian Prime Minister, Matteo Renzi, has called a referendum that could see him ousted from power, akin to David Cameron.

In a result that could have been awarded by an Olympics boxing judge the euro and its partner-in-crime, the Swiss franc, became the week's unlikely major currency winners. The euro did nothing to earn its victory, which owed more to it keeping its head down than to having delivered any obviously punishing blows. Over the seven days the euro strengthened by half a cent against sterling and added two US cents.

The US dollar index – a measure of the value of the US dollar relative to the value of a basket of the other most actively-traded currencies – fell to its lowest level since July 5th following the release of weaker-than-expected GDP data on Friday. The US advance second quarter GDP growth came in at 1.2 percent, below the expected 2.6 percent; leading investors to question the likelihood of a Federal Reserve interest rate increase this year.