USD was little changed and mixed against its major rivals in the European session on Tuesday as risk appetite improved after the Fed announced plans to start buying individual corporate bonds, while concerns for the second wave of global coronavirus infections faded. 

The U.S. currency fell against GBP and CHF, rose against EUR and NZD, and changed little against CAD, AUD and JPY.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, edged up 0.02% to 96.72.

On Monday, the Fed said it is to begin buying corporate bonds on Tuesday. The central bank will purchase the bonds under its Secondary Market Corporate Credit Facility (SMCCF), an emergency lending program, using an indexed approach. This move builds on the Fed's purchase of corporate bond ETFs, which started in May. 

Market participants await the testimony of the Fed's Chairman Jerome Powell before the U.S. Senate Banking Committee, set to begin at 14:00 GMT. It is expected that Powell may address the Fed's latest corporate bond tailwind as well as the central bank's broader estimate of a 6.5% contraction for the U.S. economy this year. 

An additional support to the market was provided by Bloomberg's report that the U.S. President Donald Trump’s administration was considering a nearly $1 trillion infrastructure proposal to boost the domestic economy.