By Deborah Levine & William L. Watts, MarketWatch NEW YORK (MarketWatch) -- The U.S. dollar gained versus the euro and British pound on Tuesday, finding support amid ongoing worries about debt problems in the euro zone after Fitch Ratings warned that Portugal remained vulnerable to a downgrade. "The dollar is stronger on the back of comments by Fitch that sovereign default risk in the euro zone is possible," said Andrew Brenner, head of emerging markets at Guggenheim Securities The euro changed hands at $1.3581, down from $1.3636 in North American activity late Monday. The dollar index (DXY 80.64, +0.21, +0.26%) , which measures the U.S. unit against a trade-weighted basket of six major currencies, rose to 80.629, up from 80.440 late Monday. The British pound slipped to $1.4994, down 0.4% on the day. The greenback bought 89.90 yen, compared to 90.29 yen late Monday. Analysts from Fitch warned that Portugal's AA rating could be at risk of a downgrade if the government doesn't pick up the pace of fiscal consolidation. Read about Fitch comments on Britain, Portugal and Greece. "Even though Fitch also stated that the contagion risk to Portugal and Spain from Greece is not great, there are sufficient worries in the market concerning EMU (economic and monetary union) to keep the euro" on the defensive, said Jane Foley, research director at Forex.com. Portugal on Monday outlined a plan to cut its budget deficit from more than 9% of gross domestic product in 2009 to 2.8% by 2013. Read about Portugal's budget plan. The euro has consolidated, however, after tumbling to a nine-month low versus the dollar last month amid fears of a Greek default. A warning by ratings agency Moody's Investors Service that it may cut ratings on some U.K. banks as the country's bailout program winds down contributed to the weaker tone, said strategists at Lloyds TSB. Read about the Moody's warning. China's holdings Currency investors were also focusing on developments in China, and clues as to the timing of allowing its yuan to appreciate. China's foreign-exchange regulator reportedly said Tuesday its currency is under pressure to appreciate. Yi Gang also said that the country will continue to hold and purchase U.S. Treasurys, and that doing so is mutually beneficial, according to media reports. The comparatively high interest rate paid on yuan deposits and expectations the currency will rise are likely to attract greater inflows of investment capital, the director of the State Administration of Foreign Exchange (SAFE) said in a statement cited by various reports. Read more on China yuan.

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