The US Dollar appreciated against most major FX peers on Tuesday with USD strength notable against the British Pound, Australian Dollar, and Euro in particular. Greenback gains appear to largely correspond with a downshift in market sentiment as traders come to realize the unlikely probability that US politicians will deliver another coronavirus aid package before the election.

This follows pushback from Democratic House Speaker Nancy Pelosi on the $1.8-trillion fiscal stimulus deal proposed by the Trump administration last weekend, which is said to “fall significantly short of what this pandemic and deep recession demand.” House Democrats are seeking to push their own $2.2-trillion stimulus package.

Meanwhile, Republican Senate Majority Leader Mitch McConnell is planning to move forward with a vote on a targeted $500-billion stimulus bill despite the slim chance of it passing both chambers of Congress. The back and forth between politicians is likely to continue and push fiscal aid needed by many Americans further down the horizon -- perhaps even until January once the dust settles from November election aftermath.

External factors weighing negatively on EUR/USD, GBP/USD, and AUD/USD price action likely contributed to broad-based US Dollar upside as well. This latest stretch of widespread US Dollar strength propelled the DXY Index higher by 0.5% to the 93.50-price level and back above its 50-day simple moving average. A series of lower highs notched since late September appears to have developed a short-term bearish trend presents an intermittent technical obstacle for US Dollar bulls before the 94.00-handle comes into focus.

Reference by: Rich Dvorak, Analyst for DailyFX.com