The Canadian dollar strengthened to a near three-week high against its U.S. counterpart on Tuesday as Wall Street clawed back much of its earlier declines and some major domestic political uncertainty cleared.

The loonie was trading 0.5% higher at 1.3980 per U.S. dollar, or 71.53 U.S. cents, after touching its strongest intraday level since October 30 at 1.3972. The gain was the largest among the Group of 10 currencies and the largest for the loonie since August 22.

The Canadian Parliament on Monday narrowly voted in favor of Prime Minister Mark Carney’s first budget, staving off the threat of a second election in less than a year. The budget proposed doubling the fiscal deficit to counter U.S. tariffs as well as to fund defense and housing programs.

“The market is a little bit relieved

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