The US dollar fell against a basket of currencies on Tuesday in Currency Trading Online as growing hopes for a global economic recovery encouraged investors to invest in riskier currencies from the greenback.

The U.S. currency extended losses against Japanese yen, after positive news about Asian Economies; the Australian dollar reached a two-year high against euro and a three-week high versus the US dollar after picked up commodity-linked currencies on optimistic gold and oil prices.

The euro, however, fell from a three-week high versus the dollar in choppy trading. Traders said the pair's inability to break $1.4450 in the New York session prompted some investors to buy back the U.S. currency.

Pending sales of previously owned U.S. homes fell more than expected in November, data showed on Tuesday. The report offset a rise in new factory orders and cast doubt on the view the housing market has stabilized.