The Canadian dollar clawed back much of its decline against its U.S. counterpart on Monday as investors weighed the possibility of Canada achieving a reprieve from U.S. tariffs, with the currency rebounding from an earlier 22-year low.

The Canadian dollar, Mexican peso and euro were steady against the U.S. dollar on Tuesday following a wild ride on Monday when they rebounded sharply from multi-year lows after U.S. President Donald Trump suspended tariffs on Canada and Mexico by a month.

The dollar fell slightly after U.S. President Donald Trump agreed to hold off imposing 25% tariffs on Canada and Mexico. However, a new 10% tariff on China has taken effect and the country said it will retaliate with new tariffs on select U.

The Canadian dollar edged lower against its U.S. counterpart on Tuesday ahead of an expected interest rate cut by the Bank of Canada and as the threat of U.S. trade tariffs drew renewed focus, leading to broad-based gains for the American currency.