The U.S. dollar rose against major currencies in late New York trading on Tuesday as Fitch downgraded sovereign credit ratings of Japan while investors lowered expectations on the European Union summit.

Rating agency Fitch on Tuesday cut Japan's long-term credit rating from AA to A+ and issued a negative outlook on the country' s credit rating, citing that Japan's credit risk is growing as a result of high and rising public debt ratios.

The downgrade hurt investors' confidence on the Japanese yen as the currency slipped against the dollar on Tuesday.

Meanwhile, investors lowered expectations of any coordinated actions out of European Union leaders' meeting on Wednesday. Also, the uncertainty of Greece's possible exit from the eurozone continued to weigh on the euro. The shared currency resumed its downward trend against the dollar on Tuesday after a short-lived rebound on previous session.

On the economic front, the U.S. National Association of Realtors said existing home sales increased 3.4 percent to an annual rate of 4.62 million units in April, the highest since May 2010. The upbeat housing data signaled positive signs of the recovery of U.S. housing market and also helped boost the dollar in the currency market.

The dollar index gained 0.5 percent to 81.648 on Tuesday.

In late Tuesday trading, the dollar bought 80.14 Japanese yen, compared with 79.36 from late Monday. The euro fell to 1.2720 dollars from 1.2793.

The British pound also dropped to 1.5777 dollars from 1.5807. The dollar rose from 0.9391 Swiss francs to 0.9443, and went up to 1.0201 Canadian dollars from 1.0190.