European Central Bank (ECB) Governing Council member Ignazio Visco said on Monday that Italy can deal with the impact of a 'gradual but necessary' rate of monetary policy tightening. 

"Alarms that are sometimes raised about effects that further ECB rate increases could have on the Italian economy cannot be shared," Visco added. "I believe it is entirely possible to reach the ECB target of inflation at 2% while avoiding particularly negative impact on the eurozone economy and the labour market."

Market reaction

EUR/USD, which climbed to a multi-month high above 1.0900 earlier in the day, stays on the back foot following these comments and was last seen trading at 1.0855, where it was virtually unchanged on a daily basis.