Fitch: Smoother Italy-EU relations do not remove fiscal uncertainty

Political divisions and differing policy views within Italy's governing coalition are likely to constrain meaningful tax & structural reforms, Fitch Ratings said in a report on Monday and further noted that the smoother relations with the European Union (EU) wouldn't eliminate the fiscal uncertainty, per Reuters.

"There is a high risk that Italy's PD-M5S-led government will not serve the full term, with near-term potential flashpoints," the report further read.

The EUR/USD pair's reaction to these remarks was muted and it was last seen trading at 1.1075, adding 0.15% on the day.