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 fell broadly on Monday, while European stocks jumped, after an official for the incoming U.S. administration said President-elect Donald Trump would stop short of imposing tariffs at his inauguration,

The government is preparing for the possibility that the incoming U.S. administration will impose high tariffs on Canadian goods, setting the close allies up for a showdown.