NEW YORK, Dec 27 (Reuters) - The euro turned negative against the U.S. dollar on Thursday, hitting New York session lows, after U.S. Senate Majority Leader Harry Reid said the U.S. economy seemed to be heading over the “fiscal cliff” of tax hikes and spending cuts.
Reid made his comments on Thursday in a Senate floor speech at the opening of a post-Christmas session. He added that time was running out ahead of a Dec. 31 deadline to avoid the “fiscal cliff”.
The euro touched New York lows of $1.3214 following Reid’s comments. It last stood at $1.3215, flat to slightly lower on the day.
The euro tends to benefit when U.S. budget negotiations run smoothly, but when there are snags, investor flows go into the safe-haven and highly-liquid dollar.