The US dollar advanced against most of major currencies on Tuesday.

The greenback rose against the euro sharply after data indicated business activities continued shrinking in the eurozone in April, which boosted the speculations that European Central Bank may cut interest rates soon.

The euro-area composite purchasing managers index fell to 46.5 in April, lower than the level of 50 that separates contraction from expansion, Markit Economics reported on Tuesday.

Meanwhile, the Flash Manufacturing PMI of Germany, eurozone's largest economy, dropped to 47.9 in April from 49.0 in March, hitting a four-month low. The soft figures of the euro area fueled hopes that the ECB may cut interest rates further.

The dollar stayed flat versus the yen Tuesday despite a sudden drop caused by a false tweet from hacked Associate Press account saying that there have been two explosions at the White House and President Barack Obama was injured.

It once approached the 100 mark against the yen on Monday, as during the meeting of the Group of 20 (G20) major economies last week, the finance ministers and central bankers did not discuss the recent depreciation of the Japanese currency after the Bank of Japan's monetary easing measures. The dollar/yen has not broken through the psychological level of 100.

On the US economic front, the Commerce Department reported that sales of new single-family houses rose 1.5 percent to a seasonally adjusted annual rate of 417,000 units in March, better than market expectations.

In late New York trading, the euro dropped to 1.2991 dollars from 1.3059 dollars of the previous session and the British pound fell to 1.5244 dollars from 1.5280 dollars. The Australian dollar declined to 1.0255 dollars from 1.0269 dollars.

The dollar bought 99.41 Japanese yen, little changed from the previous session. It edged up to 0.9445 Swiss francs from 0.9346 Swiss francs and went down to 1.0264 Canadian dollars from 1.0260 Canadian dollars of the previous trading day.