Citing six sources familiar with the matter, Reuters reported on Monday that European Central Bank (ECB) policymakers consider the rise in Italian bond yields is justified by deteriorating budget fundamentals.

"I think Italy's troubles are entirely self-inflicted, so the market reaction is quite justified. But there is a lesson for us in that Pandemic Emergency Purchase Programme's (PEPP) flexibility is valuable that we shouldn't give up without thorough analysis," one of the sources told Reuters.

Market reaction

The EUR/USD pair stays under bearish pressure following this headline and the was last seen losing 0.52% on the day at 1.0532.