The US dollar rose against its major counterparts on Tuesday, after China’s central bank surprised the markets by raising interest rates for the fourth time since October last year, which weighed on Australian dollar and euro.

The greenback was seen trading higher against the euro, with EUR/USD falling 0.35 percent to hit 1.4168 during European afternoon trade.

The euro also weakened after Moody's Investor Service downgraded Portugal's sovereign debt rating from A3 to Baa1. The rating agency said that Portugal is still under review for possible downgrade and expected the country to seek outside help in resolving its debt problems.

Separately, the Eurostat data showed that the volume of retail trade in the 17-nation eurozone dropped 0.1 percent in February compared with 0.2 percent increase in January.

The dollar was higher against Australian dollar, with AUD/USD losing 0.49 percent to hit 1.0301.

Earlier on Tuesday, an official data showed that Australia unexpectedly recorded a trade deficit in February, it’s first in almost a year.

Also, the Reserve Bank of Australia (RBA) kept the interest rate unchanged at 4.75 percent on Tuesday at its fourth straight meeting.

USD/JPY was up 0.22 percent to hit 84.24, while USD/CHF eased up 0.14 percent to hit 0.9244.

However, the greenback was lower against the British pound after data showed that UK’s services sector activity surged to a 13-month high in February. GBP/USD gained 0.64 percent to hit 1.6234.

The dollar index, which measures the performance of the greenback against a basket of six major currencies, was up 0.16 percent.