The Canadian dollar recouped much of its earlier decline against the greenback on Tuesday as investors assessed the chances of U.S. President Donald Trump carrying out a threat to impose a hefty tax on imports from Canada next month.

Trump was quoted saying his team was thinking of tariffs around 25% which could be announced on Feb. 1 but offered no other specifics.

The Canadian dollar strengthened to a near 5-week high against its U.S. counterpart on Monday as the prospect of U.S. trade tariffs grew less imminent and a Bank of Canada survey showed that firms are beginning to anticipate improved activity.

The dollar advanced against most major currencies after President Donald Trump said he may enact 25% tariffs on Mexico and Canada next month.