The euro turned negative against the U.S dollar after Fitch downgraded the long-term ratings of Italy and Spain, sapping demand for riskier assets.

Fitch cut Italy's sovereign credit rating by one notch to A+ from AA-.

Fitch cut Spain's credit ratings by two notches, just a few minutes after downgrading Italy, saying the intensification of the euro zone debt crisis has had a negative impact in the entire region.

The euro was last down 0.2 percent to $1.3404 , according to Reuters data, erasing earlier gains which had the single-currency hit a session high of $1.3524 prior to the downgrades.