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 reacted as well, dropping to a 22-year-low against the American dollar at US$0.6854. But after U.S. President Donald Trump announced a 30-day pause of tariffs against Canada and Mexico, citing new border security measures in the two countries, the dollar has rebounded sharply.

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 value of the Mexican peso and Canadian dollar jumped Monday after officials from both countries said President Trump agreed to [delay wide-ranging U.S. tariffs by a month](

The Canadian dollar strengthened against the greenback on Tuesday, and the yield on benchmark government debt climbed. The loonie was trading 0.3% higher at C$1.438 to the greenback, or 69.54 U.S. cents,