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 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.